Ok so I have this new old boat which was given to me, I will post pics soon
Everything works in my out of water testing.
I ran the 120 HP (Iron Duke I assume) engine for 7 minutes, with ear muffs. Checked the engine oil after and it was very clean, like fresh brand new oil.
Before I continue, I will do an oil/filter change.
In that 7 minutes of testing, water spewed out the prop, which shifted fine both in forward and reverse, and accelerated great at full throttle, and I was able to raise the RPMS in neutral as well.
There is corrosion on the lower unit housing and two big chunks of aluminum have fallen off from both sides, just north of the skag; also, underneath the forward part of the prop shaft, two pee holes above the water intake at the front of the leg spew out brownish water which I believe to be a collection of soot, rust, anything that can get into the housing for much longer than I have been around. I did some research and found that this is normal, so that water and other elements do not collect and cause corrosion.
My theory is that a previous owner inadvertently patched the original pee holes, which caused the corrosion, (which is in the spot where the pics of pee holes I have seen are located) thinking they shouldn't be there, then reopened two (through a mechanic?) slightly above.
For my next test, after changing the engine oil and filter, I will drain and re-lube / oil the outdrive and then run the boat at full throttle for about 30 minutes.
If all goes well, I'll repair the deep corrosion with JB Weld and take the boat out and stay near to shore for the maiden voyage.