Re: lower unit removal 1961 5.5 hp
Yes, the powerhead has to come off. Remove the seven (I think) bolts under the pan. Remove the fuel line to the carb and disconnect the throttle linkage and the powerhead should pull right off. Remove the two nuts connecting the shift rod. Now remove the four bolts on the lower unit and it should drop right down.
When you change the impeller you should use a new crankcase seal (BRP #303355 or Sierra 18-2892) and a new powerhead to exhaust gasket (BRP#313665 or Sierra 18-2901).