I totally agree with what's shown in the picture as potentially being your problem. Let's assume that the mechanic that tested the engine did a thorough job and it runs fine. Let's say that the prop is original. Let's say that you have fresh 50:1 gas-oil mix in your fuel tank.
As "Airshot" mentioned, the engine it tucked in too far toward the transom and especially with the Whale's tail, just drives the bow of the boat down and into the water. This does 2 things: Increased drag severely limiting top end and loading the engine thus reducing RPMs and speed, and second, it makes steering cumbersome.
At speed (say 25-35 MPH) the bow (front of the boat) is supposed to be up at 15ish degrees above the surface of the water. The boat should be easy to steer, very responsive to engine direction. Spray should be strong and small droplets/mist. Engine should be heard running at a high, solid, RPM. With the tail and tilt position you currently show, none of that should be occurring.
So take the cheap, easy way out.......move your tilt pin out 2-3 holes away from the transom. Take the boat out and test it. Adjust the pin out one more slot and test it. Move it back in 1 slot closer than when you just started testing it and test it again.
If that solves your problem, find the sweet spot in the tilt position and go out and have fun. If it doesn't then get out your wallet, wrenches, and spare time and go after the problem.......and when you get all that done, move your tilt pin out when you get the engine running properly.
Good Luck.