The latest service manual for your engine is Mercury part number 90-8M0047659... The original part number started off as 90-889785 back in 2004. If you plan to do your own work, it would be highly recommended to purchases a manual. If you run the part numbers online, you might be able to find a good deal on one. The correct service manual for your engine does not seem to be available online for free.
Here's your parts catalog for your engine model.
http://www.mercruiserparts.com/selectDocs.asp?doc_nbr=891837007
As a general guide, this should help you troubleshoot your engine mounted oil reservoir.
http://www.boatinfo.no/lib/mercury/manuals/115-135-150-175_optimax.html#/268
You should be able to find two wires (possibly blue with black stripe in color) coming off of the engine mounted oil reservoir. You should also have a oil tank located in the boat.
If anyone one of them are low on oil (< or thinks it's low), has a cracked or loose fitting cap, damaged seal/gasket under the oil cap, out of ohm's range on the sensor/switch, chaffed wire to ground, air in the oil reservoir or system (< most typical due to bad cap), then yes that could sound 4 beeps per minute warning horn or depending on severity at higher RPM, it could go to a constant alarm plus activate guardian mode which could bring the engine all the way to idle. It's not supposed to kill the engine, but it's possible that the engine could get so low on idle that it may die on you.
On average, anyone of the items mentioned that could be wrong has a tendency to go bad do to being mishandled during servicing.
The fuel system water sensor is located at the VST fuel tank (Vapor Separator Tank Assembly) Item number 30,
http://www.mercruiserparts.com/Show...png&inbr=13052&bnbr=170&bdesc=Vapor+Separator
Let us know what you find, good luck.
