It does make sense if you do some thinking and consider what all four games claim. I've already written this in another forum but what the hell:
H.T. Marley (grandfather of Elaine) was the beloved governor of the tri-island area, and decided to retire. As H.T. says in EMI he was lured out of retirement by the thrill of a boat race off the coast of Australia (MI2 never claims that he sails off the coast of America, but that he was in the America's Cup Race. If you're assuming this means America, you may want to perform some research of the event). Anyway, as H.T. explains, the night before he prepared for the race by becoming completely drunk off grog. At this time he also met a miserable Australian land developer named Ozzie Mandrill. To cheer Ozzie up, Marley told him about his adventures on the high seas, and well as the lucrative developing opportunities of the Caribbean. Even worse, as a result of being drunk, he also accidentally revealed secrets that men would kill for, such as Big Whoop and the Ultimate Insult. During the race the next day, Ozzie decided to push Marley into a freakish whirlpool (which we can assume was created by LeChuck since he says so in MI3. Apparently he merely left Marley for dead when he fell into the whirlpool and never discovered that he survived.)
So far there isn't a problem, right? I'm getting this all straight from the infamous EMI cutscene. Marley continues by saying that instead of drowning him, the whirlpool threw him and his broken ship on the other side of the world (one common misconception people have is that he is referring to monkey island, which is never implied). When Marley woke up, he had no idea who he was or where he came from, and took the name Herman Toothrot after the letters on his accordian which was apparently with him. Marley lived for some time under this false identity, and eventually decided to sail off as first-mate with a friend on the Sea Monkey (courtesy of Stan) to discover the Secret of Monkey Island. For details of their misadventures, see the captain's log in MI1. Anyway, Herman and the Captain become stranded, the captain accidentally hangs himself, and a crew of chimps apparently returns the Sea Monkey back to melee island, where Guybrush buys it. Now, at the end of MI1 (assuming you sink your ship, which EMI depends on what with the crew having been left on MI), Herman reveals that he has his own ship and returns Guybrush to Melee. Herman then returns to MI, because he decides that he wants to become a full-time hermit (as he explains in EMI when you engage in some dialogue trees). In fact, as we discover when Guybrush asks Herman about his ship, he admits that he destroyed it in order to become a real hermit. This also explains why he was around to remember the cannibals leaving, the amousement park, and dormant volcano erupting, etc. When Guybrush arrives on MI in EMI, Marley is in even a greater case of amnesia thanks to a coconut that had recently hit him on the head. When Guybrush hits him with that, he remembers a milk bottle that hit him, and when Guybrush hits him with the milk bottle Marley is able to remember everything about his Herman identity. When Marley vaguely remembers an accordion, Guybrush finds it, wacks him on the head with it, and the entire H.T. Marley personality is awakened.
You mentioned that Marley couldn't have been in the Caribbean for the boat race. So? First of all, he didn't have to be in Australia to hear about it and secondly, it doesn't even matter because he was in retirement when it happened, so why would he be confined to the Caribbean? You also claim that MI2 says that Marley was stranded on Monkey Island after the boat race. That isn't true.
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