Help!!!! Jet Mate....Cavitation? Bearing/seal/wear ring???????

I got this Kawasaki Jet Mate. When you give it gas it runs fine for the first bit of throttle and then when at full throttle it sounds like the prop is slipping? I know the prop is a direct connection so is there a problem with the prop making the water foam up and making air bubbles? Motor runs perfect...it seems like the problem is in the shaft/prop area. Is this a wear ring, bearing, seal problem?
 

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It could be the wear ring is due to be replaced but it also could be the impeller. If it has an aluminum impeller then it could very easily be worn down or deteriorated. If you shine a light into the pump from the shaft side and look into the steering nozzle, look for light around the outer edge of the impeller. If it is in good shape, then the line of light at the edge of the impeller should only be very tiny, the impeller should almost look like it is touching the walls of the wear ring. Kawi I believe allows for a maximum of about 0.014" clearance between the blade edge and wear ring before the impeller is beyond its wear limit, this would look like a fair bit of light getting past the impeller between the outer edge and wear right walls.
 
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