signed up for an account at just answer. They assigned a marine mechanic who just gave me a bunch of general stuff to check. I'm going to start with this and see what I find. I'll post here with any updates. Here is what he said:
1. As simple as this sounds you always start by running it off of a different fuel tank, like a small plastic portable tank. Half the time there isn't anything wrong the motor itself, but rather something wrong with the boats fuel system. This can be a pinched or collapsing fuel line, bad or old gas, or a bad anti siphon valve. Marine engines are very sensitive as to the quality of the fuel, and if any part of it is over 90 days, the fuel itself is always going to be suspect. This is a pass or fail test, and the engine is either going to run better or it is not. If it does run better, on this portable tank, first change the anti siphon valve and retest with the engine hooked back up to the boats fuel tank. If it goes back to running poor on the boats fuel tank, that tank will need to be pumped out. Bad anti siphon valves are a common problem, when they go back they create a blockage and restrict the amount of fuel that flows to the engine. If the engine does not get enough fuel it obviously will not make full power. Click this link, this explains more on the anti siphon valve and why they go bad.
http://www.sterndrives.com/anti-syphon-valve.html On this anti siphon valve there is an inlet side and an outlet side. The inlet side faces the fuel tank, the outlet side faces the fuel line. When the engine runs, the fuel pump creates suction. This suction pulls the check ball off of it's seat and fuel is allowed to flow around it. The problem with this is over time the spring in the valve will get weak or simply break. When that happens the check ball will be free to jump to the outlet side of the valve and create a blockage/restriction on the outlet side of the valve. If the spring is simply weak and not broken, this will more or less happen at random. Click this link for a picture, it will make more sense once you see it
http://imgur.com/a/tpq4H. The anti siphon valve itself is located at the fuel tank, where the fuel line connects. If you pull the fuel line off the tank you will see a hose barb, that hose barb is the anti siphon valve. As part of this test replace all fuel filters. Also, as part of this step check the air filter/spark arrestor on top of the carb and make sure that is not overly dirty.
2. If no change, then compression testing the engine is next. Your results need be about 100 PSI or better on that engine, all cylinders should be within 10-15% of eachother. If you get below 100 PSI, then the engine is worn out or has mechanical problems, and you might as well stop your troubleshooting here, as there is nothing you can do to an engine with low compression to make it run better. The next step after this would be checking that valve adjustment, and seeing of it's a valve adjustment issue causing the low compression.
3. Spark test and timing test. Your engine originally came with a points and condesnor ignition system. Before doing the actual test, install new spark plugs, points, and condensor. Set the point dwell, and time the engine. Next, get a timing light and run the engine and hook the timing light up to each plug wire one at a time and see if the timing light flashes or not. Flash means the engine is sparking when running, no flash means no spark. Again this is a pass or fail test. If there is no spark on an cylinder, change the cap, rotor and plug wires next, and this will get you spark back to all cylinders. Next up is the timing test. For this, hook the timing light up to the #1 cylinder (front right) Run the engine, and aim the light at the harmonic balancer on the front of the engine and check the timing. At idle it should be roughly 8 degrees before top dead center. If you rev the engine up, the timing should advance to roughly 25+ Degrees before top dead center. basically what will happen is the timing mark on the balancer will jump all the way to the left, almost out of sight. If the idle timing is good, but that timing is not advancing when you rev the engine up, the centrifigul force mechanism for the points is going to be rusted up. Also make sure the firing order is correct and that the correct spark plug wire is on the correct cylinder.
4. Fuel pressure test - Hook up a fuel pressure gauge between the pump and carb, measure fuel pressure with the boat going as fast as it can. Pressure needs to be at least 3 psi. If it's low, the fuel pump is weak. Make sure you do this after you do #1. If that anti siphon valve is bad that will cause low fuel pressure because the fuel pump would be struggling to pull through that restriction/blockage that a bad anti siphon valve creates.
5. Lastly, if you do all of the above steps and still do not get any kind of result, if carbureted, the problem is going to be in the carb. It is either dirty on the inside, and not flowing enough fuel from the carb and into the engine. Or it has a sticking float not allowing fuel into the carb. in any event if you get to this point the carb would need to come off and be professionally rebuilt.