Re: lower unit removal problems on 850 mercury.
Since you are down to having the water pump visable, you got all the screws out/nuts off. There are 3 things connecting the lower unit (like the ad on the right of my screen just now of a lower unit for $745 with 3 year warranty).
Starting from left to right of that picture, left is the shift shaft..3/8" diameter hex shaft that mates to a hex shift socket on the end of the shift rod in the mid section...twisting is how the gears are selected and each is detented and easily felt.
Next you see the silver (in the pic, some are plastic) water pump/impeller cover with the drive shaft (has a splined top that fits into a splined connector on the bottom of the crank...in the block) coming out of it, and just to the right of that, still on top of the water pump cover is a black circular "stove pipe" which is the water outlet, connecting to a copper tube that sticks into the bottom of the engine block.
On some engines there is a black plastic tube that connects to the speedometer inlet (1/8" dia hole roughly) which is below the antivent plate at the very front of the housing.
That's all there is in there. Since you are as separated as you say you are, one would suspect that you have the shift shaft and drive shaft separated from their mates and the only thing that could hold you (doubt it) would be the water supply tube.
Mark