Re: mercruiser 165 water leak
First off, it is NOT a GM motor. You have a 470 by a different model number. It's an aluminum block designed by Mercruiser, with a 460 Ford head stuck on top. Also has a strange charging and cooling system (as you have found out)
The fix is a called a "Speedy Sleeve" . You can find them at your local bearing house. But it's not the fix recommended by dealers. They don't always work. What you need is a new camshaft.