It's FIXED! The new distributor and coil did the trick.
The MSD 83606 marine ready to run distributor arrived yesterday from Summit. Ordered on Tuesday night and arrived Thursday afternoon.
The installation is really straight forward. It comes with a three wire harness. Red to positive side of coil, orange to negative and black to ground. I used waterproof butt connectors that heat shrink to the wires for a good seal. Since I have an alpha drive, I also needed to connect the shift interupter to the negative side of the coil. The original grey tach wire also goes to negative on coil. The original keyed 12v purple wire attaches to positive side.
Spun the engine to TDC on cylinder one and dropped the new distributor in with the rotor facing the number one terminal on the cap. Installed the cap and transferred the wires over from original merc cap.
Once it fired up I set the timing to 8* BTDC. I then tightened the hold down clamp and Headed to the lake.
I ran it up to WOT. It must be propped right since with just myself in the boat it maxes out at 4,600 rpm. I then dropped anchor and let it sit for 45 min with the seat in and sun deck down. The engine room temp never got above 130* per my voltmeter thermometer. I might take my digital smoker thermometer out next time just to be sure.
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It ran great all afternoon and into the evening. Glad to be back on the water!