By request from robinsj, here's a much neater version. Given, it can be optimized to run a lot faster, for instance by working out partials and killing off paths that don't lead to a word, or by looking ahead to see if there's a letter (saves you one level of function depth), but this should still run in around 2 minutes for the max depth of 10.

use strict;

my $depth = 10; ### Max word length, longer takes more time

my (%words, @board, %results, $width, $height);
my ($handle, $p, $x, $y);

### Load words from file, one word per line
open ($handle, 'dictionary.txt');
while (<$handle>) {
    chomp; $words{$_} = 1;
}
close ($handle);

### Load board data
while (<DATA>) {
    chomp;
    push @board, [split //, $_];
    
    ### Maximum board width
    $width = $#{$board[-1]} if $#{$board[-1]} > $width;
}
### Board height
$height = $#board;

### Traverse from each possible starting point
for $x (0..$width) {
    for $y (0..$height) {
        traverse($x, $y, '');
    }
}

### Display longest 10 results
my $c = 10;
for (sort { length($b) <=> length($a) || $a cmp $b } keys %results) {
    print "$_\n";
    exit if !--$c;
}

sub traverse {
    my ($x, $y, $word) = @_;

    ### Letter used up or out of bounds
    return if !$board[$y][$x] || $board[$y][$x] eq ' ';

    $word .= $board[$y][$x];
    $results{$word} = () if $words{$word};

    if (length($word) < $depth) {
        $board[$y][$x] = undef;

        if ($x > 0 && $y > 0) {
            traverse($x-1, $y-1, $word);
        }
        if ($x < $width && $y > 0) {
            traverse($x+1, $y-1, $word);
        }
        if ($x < $width - 1) {
            traverse($x+2, $y, $word);
        }
        if ($x < $width && $y < $height) {
            traverse($x+1, $y+1, $word);
        }
        if ($x > 0 && $y < $height) {
            traverse($x-1, $y+1, $word);
        }
        if ($x > 1) {
            traverse($x-2, $y, $word);
        }

        $board[$y][$x] = substr($word, -1, 1);
    } 
}

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