Re: 81 Mercruiser 165 6 cyl
clb,
This may help you understand why it could start and run with key in the START position but die immediately when the key returns to ON after starting...
Power to the coil is limited by a ballast resistor when the igniton is ON. This ballast is needed for differing reasons, but IS needed for most ignition coils and your engine has this type of ignition. So, with just the key in ON there will be about 9 volts to the coil, this is absolutely normal and as designed. If there is no voltage in this condition then there could be a problem with the ballast resistance component or wiring/connections.
When the key is in the START/CRANK position this ballast is bypassed to give some extra spark just during cranking.
So if there is a problem with the ballast resistance component or the wiring in that circuit then the coil can only fire when the key is in the START/CRANK. Engine starts
, key goes back to ON and the coil loses power, engine dies
.