IF you have one of these hi temp t'stats, a once a year flush won't do. If you find a way to flush this engine after every use on the boat... let me know
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re: "and said that the tube and the thermostat was all full of corrosion and basically closed up....they don't have Honda parts so they didn't want to get too crazy about dismantling it, but they cleaned out the parts they could get at without disassembling the engine"...
Curious... How can they tell the t'stat is "full of corrosion" without taking the engine apart? FYI... I just finished a T'stat replacement job on this exact same engine this past Sunday. It's either an easy job or a real b##ch... depending.... If all 7, 6mm intake manifold bolts come out without breaking, its an easy afternoons job. If one or more break.... its a real pain as you are looking at cheap magnetic S/S bolts in an aluminum head. Total parts cost is under $50 BTW and readily available... My guess as to the real reason they don't want do this job is that if a bolt breaks the labor cost will be thru the roof and they are afraid you will walk away from the engine. I had one bolt seize so badly that a broken bold extractor would not move it and I had to drill/grind it out with a dremel and then drill ( 1/4" drill bit in a hand chuck, turned by hand!) and tap it for a "Heli-Coil" insert. BTW...The only part they could get at without dismantlement of the engine involves snaking a wire back up the intake manifold at the point ( only about an inch) that the indicator hose connects to intake manifold!
If they got water to circulate, then your best bet is to put the engine in a tank/tub ( remove prop for safety!) and run it with a product like "Salt-Away" (See label instructions) Don't bother with their kit which includes a mixer widget that fits on a garden hose, as there is no way to run this engine from a hose.
The way the engine is internally plumbed, water coming out of the indicator hole is a fair indication that all is ok internally. That, and water out the exhaust pretty much covers all the path. I've been thru this drill twice on my engine and 99% of the blockage occurs near the t'stat and in the passages in the intake manifold.
Re:.. "Apparently the previous owner had it in salt water and put it away without properly flushing it."
Maybe so, HOWEVER the stock t'stat on some of these early engines had an operating point that was not suitable for salt water operation and was a 100% guarantee of salt and mineral deposits. Also... the engine does not lend itself to daily flushing
At this point in time, so long as it is being worked on... replace the water pump impeller. Best to buy the HONDA OEM manual for this engine. If you aren't mechanically inclined, find a HONDA dealer for this.
The other weak point on this engine is clogging of the carb jets (especially the idle one) due to ethanol related problems.
Short term minimum tool fix is the run the engine with a product like the one I mentioned ( or a better one if anyone has any suggestions!). Run the engine for awhile and then take the cover off and check if any part of the engine (block, head, or intake manifold) is getting too hot. I like the "spit test"... i.e., spit on part of the engine and if it sizzles or dries immediately... too hot. Conversely, dip your finger in cold water and put a drop on various places. Or spring for a surface temp gauge.