Mercury V6 XR2 - Does this Stator looks bad?

[Superjetjim]

I'm having some really random running issues with my 93 XR2 Merc, it'll idle fine on the hose and picks up cleanly out of the water. As soon as you launch it, it looses power within a few seconds, to the point it wont even idle or start. Pull it out of the water for a few mins and she fires right back up, until you repeat the process.

I've gone through the motor and done the following:

• Carbs stripped, cleaned and reassembled
• New OEM switch boxes
• New coils, leads and plugs
• Compression check (130 PSI all pots)
• Done a static OHMS test on the stator and pickup as per shops manual (I don't have a DVA meter to test the full functionality of the Stator though)

I've just pulled the flywheel to inspect the stator and found this. Doesn't look great, right? The areas that are rusty seem to have separated slightly. Also the area on the outside of the Stator in this location, has started rubbing against the inside of the flywheel - perhaps this signifies rust and bad things occurring inside the Stator?