Overheating Yanmar Diesel Inboard
Loads of sensible comments already posted on this.
Oil: good quality 15w40 mineral based diesel oil. A low oil level will make it run hotter than intended but I don't think it would be enough to cause an overheat.
It may or may not have been serviced and as mentioned even if it has been done it is unlikely to have been run hard enough to show up an overheat.
6LP's need a lot of raw water coolant flow and should be configured from new to pull water through the drive leg/transom shield and through a separate through hull seacock. Most are installed correctly but if hasn't got the through hull seacock it wouldn't take much of a deterioration in the cooling system to cause an overheat. Sorting the overheat is one thing but depending on how hard you were running it and how long for with alarms on there may be other damage especially given the fact you seem to have a possible lubrication system problem.
If you decide do go ahead and get it fixed as mentioned get in touch with Graham (Yam Man).
Good luck with it.