Re: What should compression be on this motor?
agree, it's probably a bad idea to run avgas in your motor. no doubt it will run, but I have a feeling it wouldn't perform as well and probably has some long-term consequences.
The original rubber fuel system components in your 1976 outboard might be alcohol-resistent, but probably not. If the carbs & fuel pump have been rebuilt since the mid-80's, and fuel lines replaced, then the motor will run just fine on E-10. I've been running it in a '79 model for years with no problems.
The main problem with E-10 (apart from adding to the cost of gasoline while making it less powerful), is in the handling & storage. If water gets in the tank, it's more likely to be more trouble than straight gasoline. Any water dissolved in the gas will take the ethanol with it if/when it separates (which will happen if the temperature drops); then the whole batch is worthless.
The PRIG treatment mentioned above looks like pretty good stuff, but it claims to restore bad gas to usable condition, I'm pretty skeptical about that. I'd be interested to learn whether you've experienced that. I add seafoam to my gas, so the carbs stay clean & the cylinders don't get coked up, but it won't do anything about the ethanol.