I'm no expert but; clearly, if it's isolated you should see open circuit from both positive and negative. If you see 12.7 between positive and hull you have a negative ground connection to the hull, somewhere. You should ideally see zero volts and/or infinite resistance (open circuit) measured between the hull and each battery terminal.

I'm guessing the connection might even be raw water in the engine block. Does your engine have an isolated block? (Mine has a relay that only connects engine ground momentarily with the starter or stop solenoids are activated. Mine also has an isolated drive shaft.)