vertical water spray from motor

[Keywest18]

Ill start off by saying my boat had a 20" transom and icut it down to 17" for my short shaft .with ot like that ot sits about 1/4" above the bottom of the boat. I ran it like that and no matter how I trimmed it I got vertical spray coming from both sides of the motor. I raised it to where its about 3/4" above the bottom and I got less spray and it ran fine but still sprayed equal amounts on both sides. Raised it to about an inch above the bottom of the boat and it ran ok on the second notch I can tell it was running a lottle higher rpm but nothin serious. On the the third trim setting I couldnt go past half throttle before it was over revving.so far it ran best about 1/2" above it I got 26mph but I still got spray.i dont wanna lift it anymore I even dropped it back to about 1/2" above the bottom cause it seems to run good there and ikno I have good water pressure.anybody have anyodea what could be causing this? Heres a picture of how it is,now