That IS not a repair or fix! Now you risk transferring this slime through oil system. When oil "jellys" in the tank the repair is to clean tank and change oil
Most HP I have ever seen on dyno XR4 was a tad over 160hp at prop. The 2.5L XR6 is a detuned 200Hp with a lil over 170hp at prop. Merc never made a 200hp 2L engine but did make a SST120 full race 2L that was a 180+ at prop.
The thermal air valve is a valve that look like a tee on the STARBOARD cylinder head.
It controls air flow through the idle circuit of the carbs, and when cold (closed) it enrichens the low speed mixture of the idle circuits.
When it opens (at around 100 degrees ), air is supplied to the...
The poppet/t-stat housing has to seat firmly against seal in head, leakage will cause the leaking side to run hot. It is normal to see the starboard side to run 10-15° hotter than port.
Needs torn down, that cylinder bored and possible the others depend on how they "mike" out size wise. After you fix the result, you need to address the problem as that is preignition, either coil/pack ot timer base problem