Don't use the motor until you get this sorted out. If the thrust washer is not working correctly, or you have the wrong one, the prop will hit the gearcase housing and ruin it.
A Mercruiser should have a thrust washer that goes on prop shaft first, and sits on the taper of the propshaft. You might need one customized to the Turning point prop. See if the rear edge of the thrust washer recesses into the base of the prop.
Newer Turning point props have a one piece rubber/plastic hub with a splined brass center. These are custom to Mercruiser, and you need the right one. These fit into the prop casting.
Slide the prop and hub onto the propshaft. You then should install some kind of spacer. I would expect a silver piece of metal with splines inside to match the propshaft splines. Make sure those mate. Over that goes a spider washer and Nylon centered brass locknut.
Tighten the nut down. When the nut is nearly tight, pull the spider washer onto the nut, mating the recess with the nut, and tighten some more. Block the prop with a 2X4 and tighten securely. Bend 3 prongs of the spider washer down to hit the spacer.