Re: Can you red line a motor under load?
Governer? NOT
Don't turn anything but the control handle yet.
The prop is the RPM limiter on an outboard. If the motor will not perform then basic troubleshooting needs to be done to isolate any potential problem and appropriate repair/adjustment can be made without risking extensive and expensive damage to the motor.
Start with a couple simple tests, compression on each cyl, then spark test each plug wire to ensure a hot blue arc at least 7/16 inch. Once these two are confirmed then you will know that the motor is mechanically sound.
Check here to see if the service manual for your model is still available
http://forums.iboats.com/showthread.php?t=309079
Study the section on carb cleaning/rebuilding with new carb kits (cheap enough) then adjust the carb linkage and ignition timing exactly as spelled out in the manual.
Only after all this is done can you begin to evaluate performance at WOT. A tach is highly recommended as the WOT RPM is the best factor in determining performance.