The biggest killer to the motor is clogged block drains, You must remove the quick connects from the fitting to insure complete draining of the block.
From what you describe you never drained the motor only the manifolds and hoses.
To be safe drain everything ,pull the block drains and probe...
Remove the outdrive and make,beg,borrow a T bar from pipe and a used input shaft welded up. Remove the heads to determine the damage.
spray a -penetrating oil in the cylinders .
Heat the tops of the pistons with a torch `use penetrating so;vent.
add a length of pipe to the T for leverage and try...
the rear trans seal can be replaced without pulling the motor IT AND ITS A BIG IF you can slide the prop shaft back far enough to remove the coupling from the prop shaft. Last one I did this way was to remove the prop first because it hits the rudder
do the test of the white/green striking a ground. If you get spark the module inside the dist went bad. and is economically replaced .
If your switch is a N/C type then to make it work it needs to be spliced in series with the coils purple wire to interrupt power the normally open switch...
mercruiser V6 flat tappet motor .I use this runs cooler, has high zinc, and has much better oil pressure when hot
Shell Rotella 5 gal. 15W-40 T4 Motor Oil