Re: '78 Mercury 800 starting issues
Sounds like you need to rebuild the carbs and fuel pumps. It could be either bad gaskets and/or worn out float needles causing the fuel to come out.
A carburetor works by mixing fuel into the airsteam to create a combustible air/fuel mixture. The gas is mixed into the engine's intake airstream by being sucked up through "jets" (essentially precise hollow screws) and various passages in the carb. The jets and passages gets the fuel from the carb's float bowl. Inside the float bowl is a float (usually made of hollow plastic or hollow brass). The float floats on the gas inside the bowl. The float goes down when gas is used to allow more gas to enter the bowl. When the bowl is refilled, the float raises and presses up on the float needle. The float needle presses against its seat and cuts off the gas going into the bowl. This keeps the gas level in the float bowl at an ideal level for the jets. If the float is cracked and sinks in the gas, or if the float needle and seat are worn out, fuel continues to flow into the bowl. The gas has to exit somewhere so it leaks out externally, unless the engine vacuum is high enough that it sucks it into the engine (which would create an overly rich air/fuel mixture).
Of course you may just have a bad fuel pump inlet gasket, but if you are rebuilding the fuel pumps, you might as well rebuild the carbs because their gaskets will also be worn out.
It is probably running worse in the water because of the increased exhaust back pressure.