Re: 1st boat project. All info is welcome.
My boat is almost exactly the same as yours and is rated for 70hp. I'm sure the Yamaha would be fine. I have a Selectric Shift motor too and you can use the toggle switch but you MUST wire it correctly. Green is forward, Blue is Reverse.
This was Posted by an iBoat member a while back. He stated he was NOT responsible for any burned out coils or electronics in your motor if you made mistakes. And Neither am I!!!!
Re: shift switch to 3 way switch HOW???
(Toggle Shift Switch Setup For The Hydro Electric Shift Unit)
(J. Reeves)
Due to the unavailability of the "Push Button" (Evinrude) or "Toggle Type" (Johnson) shift switch that is required for the "Hydro Electric Shift" type lower units that existed between 1968 and 1972, many boaters have asked how they could rig up a toggle switch to perform this shifting function. There may be much better solutions but the following is what I have come up with.
One must keep in mind that wiring a toggle switch in such a manner allows one to accidently shift from forward to reverse at full throttle. This could and probably has resulted in injuries to boaters, not to mention the mechanical damage. Should this or any other problems arise/occur, I am in no way to be held responsible for the toggle switch to shift switch replacement mentioned here.
For the above reason, I strongly suggest that the toggle switch have a hinged hard case cover installed over it so that the toggle can never be thrown/toggled accidentally.
Now, with a single pole double throw toggle switch installed so the the "Green" wire connection is facing up or away from you, make the following connections to the terminals on the back of the toggle switch.
......O <--- Green Wire
......O <--- 12 volt Supply
......O <--- Blue Wire
Now, between the Green wire and Blue wire terminal on the toggle switch, connect a diode capable of handling 12 volts (available at Radio Shack etc). Be sure to install the diode so that the voltage will travel from the Blue wire connection to the Green wire connection only...... and not vice versa!
Now, if you have installed the switch as above, with the toggle pulled all the way back (towards yourself), contact will be made between the 12v supply and the Green connection. This puts the unit in Neutral. The diode prevents any voltage from gaining access to the Blue connection.
Pushing the toggle lever to the middle position results in no voltage being supplied to either wire. This results in the spring loaded clutch shifter dog in the lower unit throwing the unit into forward gear.
Pushing the toggle switch lever all the way to the front position will have the center 12 volt supply connected to the Blue wire connection, and due to the diode, that 12 volt supply will also be supplied to the Green wire. This results in having the unit in reverse gear.
You just want to drill about 3/4 of the way into transom....DO NOT drill through outer skin 
