Overheat/Loss of Power?

I have a 2002 40HP Merc 2 stroke. Today while I was running on plane it suddenly lost almost all power and started steaming/smoking. The water outlet wasn't pushing water but steam. I shut it down and trolled back to the dock. Am I right in assuming it is a water pump or pump impeller? Also, the thermostat poppet in the engine block was popped out and looks to be in bad shape. Would that piece cause the problem I'm having or is it a result of the overheat. The aggrivating thing is my overheat alarm never sounded. If I repair the water pump, what are the chances it did more damage? I only ran it for a minute or two before realizing the issue. Sorry for all the questions. This is the first trouble I've had with this motor. I'm confident I can replae the water pump, but past that it's over my head.