I was lucky and the fuel pickup fitting came loose with a good bit of pressure but it did eventually break loose. I had read no to tap it as that could crack the aluminum weld, so I just pulled really hard with steady pressure.
The precious owner had somehow gotten into this fitting before without cutting, but i could not so I had to cut a small semi circle above the fitting to pull it out. The rubber tube had been replaced with a threaded aluminum tube with a V cut into the bottom of the tube to keep it from sucking onto the bottom. The threaded end of the tube however did not have any sealant on it so that is where the air was getting sucked into the fuel lines. It also had a small micron screen inside that fitting that was a little clogged which I am sure was causing the air to leak on the unsealed tube. If that screen was clean there wouldn't have been enough vacuum for the air to leak, but since it was clogged air was intruding. I just removed this screen as I already have a water/fuel filter that will handle much more debris than that screen.
I reinstalled the pickup tube and ran clear tubing back to the stock fuel pump and took it on another water test. After the initial air bubbles were purged from the fuel line the motor ran great and I could go WOT as long as I wanted without any starvation or air in the fuel lines. I actually got up to 40 mph today which I was not able to do before this fuel problem. This was with a lower pitched prop but the motor was running better as well.
So I guess the question has been answered....Having the top carb 3' above the fuel tank is not a problem for the stock fuel pump!