All the 323 engines take in lake or seawater to cool them. The difference between raw water cooling and fresh water cooling is the presents of a heat exchanger, A heat exchanger is a device where two liquids pass through separately but never mix. In a raw water cooled boat there is no heat exchanger and the external water source either lake or sea water is run though the engine block for cooling, In a fresh water cooled boat there is a heat exchanger were the raw water source is used to cool the antifreeze that circulates inside the engine block. Take a close look at you engine and see if you can find an antifreeze tank, very similar to your car. On my Volvo MD11c engine the heat exchanger is a round tube about 16 inches long and 2 inches in diameter with 4 hose connections of raw water and antifreeze to enter and exit. It is located right above the exhaust manifold. I hope that help