... we don't want to start throwing parts at the problem only to find out it isn't the parts, thereby wasting money.
Agreed...
I hope you can bear with me... I'd like to go back to basics.
So, what we have is...
1977 Ford V8, 351 with a 2 bbl carb and a Prestolite or Mercury Marine distributor. Does it still have points? Also would like you to check and confirm a few things. Please confirm original coil (check the primary resistance, should be around 1Ω), and there should be a resistance wire between the coil + and the electric choke supply wire. That wire needs to measure around 1.9Ω. See if you can get a Fluke meter to make these measurements.
Now, here's a test I think may help isolate.
You need to be in clear water. Travel in gear at about 1000revs, then quickly pull the lever back to neutral. This should pull the drive out of gear, but NOT trip the interrupt switch (no load on the prop to hold the undercut on the dogs in)... Do that a few times and see if you get a stall and breaker trip... If you don't, move to the next test..
Again in clear water. just at idle, in gear, have someone manually move the lever that trips the shift interrupt switch in the same direction as it's moved when you pull out of forward gear. That raises another question. Does it only trip the breaker when coming out of one gear? (either forward or reverse) Or is it either? Now, when your assistant pushes the lever to stall the engine, have him/her hold it in that position, don't release it. Trip the breaker?
Let us know how you go...
One last thing. You were going to get me a photo of the instrument panel...
Chris.......
Just had a look at a drawing of your shift plate and I believe the lever will need to be pushed away from the remote control shift cable to simulate coming out of forward gear.