The engine literally locked up when coming to a 'slow down' with the
boat. I tried to restart it and it acted like a low battery. The first
thing I thought of is: "ok we're overheated" but the temperature was way
under 150.

The engine had a pretty big jerk from the starter trying so hard. so I
knew it wasn't a low battery or bad starter. Sometimes I would get it
started and all of a sudden a lock up.
I had to be towed back to the boat ramp. This engine did not overheat. I
felt the manifolds and they wasn't barely even warm.

When I got home - I hooked up the ear muffs and it started right up. Ran
normal. It had me scratching my head.

I checked the oil and noticed it was about 2 quarts over the full mark.
It was not milky. So no water getting in the oil. I drained the oil and
it smelled like gas. I'm guessing gas is getting into the oil from the
Carb. So the engine lock up was from the crankcase being totally full of
oil (and gas in this case.)

When you come off plane and the backwash rams the rear of the boat there is
a possibility of water being rammed back into the engine and causing a
condition called hydrolock. I would think that that mostly happens with
thru-hull exhaust. I don't know if that is what you had, or why it went
away by itself on occasion.
The gas in the oil is possible not related to the lockup condition. If
there were gas being pumped into the manifold, I don't think it would allow
the engine to run, if there were enough of it to cause a hydrolock type
situation, and you imply that the engine was runnning when it happened "as
you were coming to a slowdown". Perhaps you could look into the carb before
and immediately after running the engine to see if the electric pump is
pumping extra fuel past the fuel bowl due to a float valve not completely
closing.
Check the side of the block to see if there is an old manual pump still in
the circuit.
I have a '95 4.3L with electric pump and a 4-bbl carb. On mine, the power
to the pump goes through an oil-pressure switch to prevent the pump from
filling the engine with gas when the engine is shut off. If your pump runs
before you start the engine, or continues to run after shutdown, then look
for that switch, and see if it's working(though that shouldn't cause any
problems on a "slowdown").
You might pull the plugs and look for any signs of water ingestion in the
cylinders by checking the condition of the plugs.