Update on the progress
Today I continued working the flywheel slowly cycling it around adding fresh solution to the cylinders. I drained everything out and checked compression. I had 115 in the upper cylinder and a tad above 100 on the bottom. The gearcase was empyt so I filed it with new gear oil, installed new spark plugs gapped to .030 abs hooked up the fuel lines. When I primed the tank fuel was slowly leaking from the connection but I continued. It fired up after several tried and the assistance of some starting fluid. Water was pumping out great and we began adjusting the low idle. We couldn't seem to be able to keep it running when we moved the handle to slow, it would die out. We put in forward and blew most of the water out of the barrel lol. It was running very smooth. After about 15 minutes of running it quit pumping water so we stopped. The water in the barrel was nasty. I dropped the lower unit to inspect the impeller. It appeared to be shot. Some of the fins on it were more bent than others and there was a lot of crud in the housing. I believe all of the rust chewed up the impeller as it was being pushed out of the engine then sucked back up into the pump. Going to clean it all up and replace the impeller and try again. I was shocked at the compression readings this old motor had.
