Replace it.
As to why it fried.....I wouldn't know.
I looked up your part and it's pretty pricy so you may want to do more testing of the other components.
I know less about that.
Here is a video of the simple test of a 3 wire rectifier. Remember a rectifier just changes ac energy from the stator to DC current.
This is just testing the diodes but it usually shows the signs of a bad one. There are more complex tests online but watching this simple test gets your feet wet...
Others have said before because your not using a stock omc key. I'm sure people will pipe in shortly.
You might have to lap the flywheel and are you using a torque wrench to tighten the nut?
Most of the engine parts you can buy OEM new in lots of places, if your looking for the steering tube, clamps.....t&t then I would try to find a parts motor.
Ate yours corroded out or what's up?
Well it's not American made but then what is....
Fine motor really just look for signs of misuse. (Salt damage, greased fittings, paint sun damage )
To bad it's not a two stroke!
Battery, corroded wire or something along those lines is where I would start.
Check voltage at starter solenoid from battery and then the other side of the solenoid while turning the key.