Not sure what would happen to my engine, I suspect it would simply shut down quickly due to backpressure, or at worst as JDM describes...

My ignition is a key start, located below, so it's pretty easy for me to configure a foolproof way of reminding to check before re-starting... I simply remove the key if I've closed either the water intake seacock, or exhaust valve, and clip on a tag appropriately labled...

Another advantage to an exhaust valve, at least it would seem so to me, is the ability to seal the exhaust during winter layup, or any protracted layup - that's got to help inhibit corrosion to at least a slight degree in the exhaust elbow, and beyond...

I've used a Marelon valve, like Brian mentions below, a metallic valve in such an application could be a cause for concern... But, if your discharge really is 3 feet lower than the high point, and given the amount of offshore sailing you've already done, chances are pretty high you're probably good to go...

And as Brian also mentions, side discharges will generally pose the greatest risk... However, that's how I've configured mine, and I really like it. On my boat, it both shortens the length of the run compared to taking it out the transom, and allows me to put my loop up under my cockpit coaming, higher than I'd be able to at the stern. And it makes the shutoff valve easily accessible, all I have to do is open a cockpit locker, it's right there...

But the thing I like most about a side discharge, I feel I'm far more likely to notice any reduction or interruption of water flow, than if it were coming out much closer to the waterline, out the transom... And, for those inevitable times when you're motoring DDW with 1 knot of breeze from astern, a side discharge seems to keep the cockpit freer of exhaust...