Thanks for all the input.
I got the same answer from Astroflight on the need for diodes. The explanation I got was that the Opto-Isolation circuit took care of the possible feed back from the motors, and would not allow the spikes to reach the scr's.
To restate: I'm not having any problems with the motors, or ESC getting hot, they are barely getting warm when I run the boat.
Just extremely hot battery packs, and only one failure, due to a shorted cell.
The Astroflight ESC is working fine, and it's not water cooled.
I need to design a battery cooler I guess. LOL
Got the Boating bug bad now. Looking for a boat kit to work on during the winter months.
Thanks again for all the info.