Hmmmmmmmm...Took me 8 coats before I figured it out.  I shoulda asked a question on my first yak.  If you have 3 layers of epoxy on and it is sanded smooth with a 220 grit,  it should look like that.  You are ready to varnish.  Or paint.

Don't forget to read the varnish tutorial on this site.

To get an approximation of what a half-dozen coats of properly applied gloss finish varnish will look like, simply wet it down with clean water.  If you've finished your sanding with 220 grit and then wet it down, you'll be amazed -- and pleased, and reinvigorated -- to see how it looks!

Arlene,

It's not nvere-ending, don't worry. There are only 2 reasons to sand - first, to get the gloss off the  epoxy so that the varnish or paint will stick to it; second, to smooth the surface so that the finish doesn't look bumpy. It's real easy to tell when you've accomplished the first, and if you don't care about a bumpy finish (otherwise known as a workboat finish because people who make their livings from their boats don't have time for this nonsense) you're done.

If the finish does matter to you, then you need to be sanding off the high spots and filling in the lows with new epoxy. If all you do is sand everything, recoat everything and sand it all down again over and over, it'll take forever and you'll put the epoxy salesman's kids through college.

Instead, sand only until the bumps are gone. If the epoxy is starting to get too thin in some spots (you start to see the glass), stop before you get into the glass and put a very thin layer of epoxy only on the low spots. Repeat until the bumps are gone, coat everything with one more very thin layer and give it a final sanding with #220. You can tell when you're done because it'll be smooth and uniformly dull. If you see any shiny areas or pits, those are the low spots.

Finally, it's OK to try out your boat in just its epoxy underwear. That way if you find out that something needs to be changed, you won't have to do the whole finishing process all over again.

Have fun,

Laszlo