While reading rec.boats.cruising, I noticed "1.156"
felt compelled to write:

My Yanmar 2gm used to go 3400 rpm -- I did it a couple of times just to
see if it would go the recommended redline. But now it will only go
2800 rpm full squeeze. And at 2800 rpm (either at the slip or under way)
it puts out a little whitish smoke. I've been thru the fuel system and
so far can't find anything that would be limiting the fuel flow (new
hoses, new filter elements, etc).

I had one of these, and from memory white smoke meant:
1./ Retarded injection timing
2./ Insufficient compression.
Either of those would knock 600 RPM off the top.

I seem to remember that they were meant to develop 13hp @ 3400, but
rev out to 3700-odd redline, although I never got mine over 3500.

Might be a stuffed injector, or a badly adjusted valve. At the more
expensive end of town, a head gasket or broken ring or worse.

One thing I found with this engine (I'm assuming you have raw water
only cooling) were similar symptoms if the raw water system was
getting too clagged up and the temp was elevated, although not so much
white smoke, admittedly.. Might pay to check that, too.

Any suggestions of other reasons this thing won't go full blast.?

Those are the best I can do, but I'm no expert

Ian