Re: exhaust
So it looks like there is only one peace but I don't know how you could put on or keep it on when you raised the outdrive. Help
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Looks like your exhaust bellows did a disappearing act, leaving just the clamp portion and stiffening wire there. Did the boat get a loud exhaust tone all of a sudden? She'll run fine with or without it, but you should have either the bellows or optional "exhaust tube" on there to keep exhaust gasses away from the input shaft bellows to prevent the exhaust from damaging that one too. The exhaust bellows connection points are oblong on drive end and round on the transom end.
If it was brittle enough to bust off and disappear on it's own, due to age, I would certainly be looking at the condition of the big input shaft and small shift cable bellows too, since you have a nice clear shot at them with the exhaust out of the way..... They may be due (way overdue) for replacemnet too. Failure of either of those 2 is very very bad.
If you are going to do the work yourself, get the Mercruiser manual (available for download on here), if you don't have it already (which I doubt because you are asking these questions). Do not rely not the manuals you find in the discount auto parts stores. The Mercruiser manual explains everything in great detail. Replacing that bellows is "usually" quite easy, but can be frustrating the 1st time untill you learn the "tricks of doing it".