Nothing is wrong.
Your 10-8 prop is too big. It is not even listed on the chart:
http://www.balsapr.com/catalog/motor...ductId=T433964
Try a 9-6 or 10-4.7
Extrapolating from the chart, your 350 with 10-8 prop will draw over 8amps at full power, 6 amps at 75%.
The battery has 1500mah which gives 1.5amps for 1 hour, 3amps for 30 minutes or 6 amps for 15 minutes. Add a minute for reserve to keep the battery from discharging completely and destroying itself. So your time of ~14 minutes is correct.
About your battery. The writeup on the Balsa Products page about your battery:
http://www.balsapr.com/catalog/battN...ductId=T231537
is written by the same crackhead that told you it would run the motor for 45 minutes. This LiPoly cannot discharge at 15 amps contineously, maybe 8 amps but even that is pushing it. That's the reason yours is hot. It is running at max discharge. Also, if you follow the note on the battery page about charging at 2C expect to call the fire department because the battery will explode.
In short, nothing is wrong with your runtime.

Fritz