"Locally the West Marine epoxy is quite expensive." Polyester resin is cheaper and will work just fine unless you are putting it over already existing epoxy resin.
I was also wondering if there was some way to blow out the water passages with compressed air? I read a post where someone used compressed air on the water intake tube while the lower unit was off. Not sure if thats a good idea or not. Maybe someone will have a better idea.
Mine are zinc in salt water, but I trailer my boat. Zinc is probably fine as long as you replace them when needed. Don't forget that your motor likely has internal anodes as well as the two you mentioned.
I'm not familiar with those engines, but when you get an alarm don't the gauge tell you what the alarm is for, as in overheat, low oil pressure, etc? Are you sure the oil level is high because you overfilled and not water getting in there?
Ever try running it with the thermostats removed? Did the old impeller have fins missing that might be clogging a water passage way? Maybe run some descaling product thru it in case you have buildup in any passage ways? I would stop running at WOT until I figure out the problem or you might...
Some people make a wedge that goes between the sloped transom and the motor bracket so that the bracket is mounted in a more vertical position. This might help some. Also some brackets have more vertical travel then others, you could look at that as well. That motor really should be a little deeper.
Maybe the valve in the fitting is stuck? Can the whole fitting be unscrewed out of the housing it is in and either fixed or replaced? I think I would still have a look at the impeller if it took a deep immersion in water to get a tell tail, doesn't sound like its sucking up water very strongly.
Found this on the internet, https://www.westmarine.com/t-h-marine-quick-flush-fitting-for-mercury-outboard-2599181.html Looks like you have the snap in type of fitting, or the previous owner put it on.
Where are located? Its hard to judge the size of that print without something to compare it to, like a measuring tape. Off hand I'd guess a dog type track as it seems to leave toenail impressions and a cat wouldn't as its claws would be retracted. I think a bear track would have the toes more...
What kind of motor is it? On my Yamaha the fitting is just the usual garden hose screw on fitting and is below the cowl so that you don't need to take the engine cover off to flush. The tell tail shoots water out when flushing this way. I would be a bit concerned that the tell tail doesn't "pee"...
I wouldn't drill from the outside. You won't tell a lot from a small drill hole anyway. As tpenfield says, try to get a good look from the inside, otherwise you will always worry whats really going on down there.
Get yourself the 4 stroke! They are certainly not considered disposable where I am. Yah gotta move with the times, I didn't even know they still made 2-strokes!