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The factory condenser are very reliable.------What other trouble shooting was done ?----Did you install new coils , yes or no ?-----New wires threaded into the coils , yes or no ?

The oil in the sump does help as a heat sink.

The lower shift rod is threaded into the lower unit.-----I believe you turn it all the way in.

Very typical damage.-----Motor needs to come apart for piston / ring work.----Not bad if you can do the work yourself.

I think it may be more than a new head gasket to fix this.----Take head off and inspect cylinders !

Throttle plates do not need to be open on a 2 stroke to test compression.

Generator fuse ( field ) is a 4 amp if memory is correct.----Have not worked on one in a while.

Sorry----I guess I missed all that in post #1.-----Good luck with it.

Step #1 is a compression test.-----Post your numbers.-----Next is a spark test.-----Does spark jump a gap of 3/8" on all leads ?-----I chuckle when I read ----" rebuilt the carburetors , motor still runs the same ".

Use a proper spark testing device.---Easy to make with wire and piece of wood , stick , tape at home.----Spark on a good system should jump a gap of 3/8" or more.

Much less effort is to find a bigger motor.----Guaranteed results.------Should be a few 70 HP motors in your area.

Mercury provided the wizzards for some time.-----Visit-----aomci-----website for all you need to find parts.----Post free wanted ad there.

Need the junction boxes with voltage regulator and solenoid.

Normal.

Well-----0.030" ----0.035"----0.040" ---You won't notice the difference.

Folks often take the thermostat put when they are unsure of how to proceed.- Motor should still pump water.

There may be more things wrong with this engine.-----Post the compression test numbers.-----Any other trouble shooting done ?-----Water pump impeller changed recently or never ?-----Checked for water in the fuel ?----Flywheel key checked ?-----Might be running on just 1 cylinder !

You might want to run with a 50:1 mix in your fuel tank.-----Mark oil tank.----Then calculate how much oil is being injected.----Or have a shop run a test on oil injection system.

Need to tear engine down.------Inspect cylinder for cracks.----Determine reason for the failure.-----Then do the repairs.----Inspect all other cylinders too.-----Clean carburetors.----Inspect oil injection bits if that system is in service.

That was 12 years ago.-----I am sure it was sorted out.----If you are looking for the same parts , start a new thread on this site.