Those numbers are not encouraging.------Maybe inspect float valve on bottom carburetor.

I think there are a total of 4 nuts to be removed.----Also keep track of any washers ( shims) when the top cowl lifts up and off.----Might have to deal with choke solenoid wire as well.

First thing I would do on one of those is a compression test -----Post the numbers here.

The first thing to do is a compression test.-----Post your numbers.------No point spending any time or beer tokens without a compression test.

Absolute ZERO chance it will bolt on !!----Splines on top of driveshaft are totally different !!----Other differences as well.

There is ZERO chance that an 85 HP 4 cylinder lower unit fits !!!-----Just can not be done.

The tell tale indicates that the water pump is working.---However the tell tale water does NOT circulate through the block!!------I strongly suggest there is a blockage in water jackets.-----Research...

Stop-----Review the correct way to measure shift rod height !!----Or hurry to your local boat shop to save you some aggravation and beer tokens.

A " direct injected " motor will not run for very long with oil mixed in the gas !!----They do not operate like a conventional 2 stroke.----If oil tank was empty you should do a compression test and...

Set at 21-27/32"-----Was it in neutral when you measured / set it / guessed at this important measurement ?

Might just be the cavity drain that was plugged , water froze and cracked it.----Very common.----Pressure test the gearcase.

What length did you set it to ?

Charge battery and inspect starter.

People take thermostats out because they do not know much about outboards !-----Step #1 is to remove flywheel ( 3 bolt puller ) and inspect coils.----Install new water pump impeller before your next...

There is no EMM on this motor !!!!

Trust your friend and replace the stator I guess.

How did it run for you last season ?--------Check the gear oil.-----Check for bent propshaft.-----Bent propeller ?-----Hard to diagnose without good facts.

What is the serial # of your motor ?----And have you looked at a parts diagram for that serial #-----This should be easy for you to figure ot !!

They have made those 4 cylinder motors since 1954 or so.----I have one of those.-----I do not believe these motors ever had a thermostat installed !!

Missing wire may have been for an overheat warning.----Not all Mercury motors had that feature.-----But it was built into the wiring harness I believe.