Volvo Penta MD5 more findings
When studying more detailed the old faithful I found that there is something wrong with the thermostat housing. The hole inside the housing seemed to be a little odd when compared to a new housing:
Due to corroded and way too big hole the cold water from water pump leaked directly to exhaust without going into engine. The situation was even worse because water channels inside the engine were full of rust and debris. The hole shall be around 5-6 mm to allow cooling water to enter exhaust pipe when engine is cold and thermostat is closed.
Unfortunately the thermostat housing has become obsolete. You are not able to buy it as replacement part anymore. I considered as an option to 3D scan the housing and to make a new part from aluminium with milling machine. But before that I decided to show the part to our local mechanics workshop Turengin Konepaja. They managed to fix the hole by welding with only 20 euros!