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ted williams 7.5 hp outboard

I have a ted Williams outboard 7.5 hp #217-58587-0. It cranks on land and not in the water. As soon as I put it back on land it cranks. I can only crank it on land in gear but when I go to put it in neutral it shuts off and wont crank in neutral. But starts back up in gear. Any suggestions or help. thanks.
 
I was able to find the parts diagrams at sears parts direct and that is an odd duck. It looks like the clutch dog is at the top of the driveshaft between the crank and the driveshaft? There is a lockout on the shift linkage and that is normally to keep you from starting it in gear. If it is not running in the water that could be a backpressure issue hopefully your not running it without water to the pump. If so you need to replace the impeller. Check the compression and get back with the results?

The motor has a pull chord and is not electric. It will run in a bucket of water fine but when it goes in the pond you will were out your arm trying to start it. I checked the compression and it is 80 psi.
 
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