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1986 Johnson 90 J90TLCDC loss of power

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New guy here with a problem. I have experience with older 2 stroke snowmobiles and I have restored several older motorcycles over the years, so I know my way around a motors bit, but not boat motors.

1986 Johnson 90 j90TLCDC:
The original issue: I was running on the Detroit River and it was going great, about 35-38 MPH. It just began to slow down like I was throttling down RPMs over a period of about 30 seconds. It would run in neutral, but no power in gear.
I replaced the ball pump in the fuel line and got out Monday. There's no change in the running. I verified 110 psi compression on all four cylinders cold yesterday.
If I start it in neutral and just let it sit and idle it starts out idling low and then slowly increases in RPM. Using the throttle lever I can actually get it revving all the way up to 4500 RPMs. And it runs pretty smooth. I pulled the cover off to look at it and it's getting fuel fine now, so maybe the ball pump had a little bit of an issue, but there's still something going on.
When I put it into gear and start to move it just wants to bog down. I'm not getting power. In neutral my prop spins freely, in gear I can't get it to move without turning over the engine, so it doesn't seem like a lower unit issue. It also has plenty of water pumping through.
I could push the 18-ft boat up to about 6 or 7 mph in gear once the engine was good and warm using the throttle, but it won't go any more than that and it seems like the engine runs rough and wants to cut out when it's under power. If it's not real warm it will just bog down and quit.
The spark plugs look great, there's no fouling and the color looks really nice. It just seems like it's got to be a fueling issue, but it's crazy that it spools up nice I'm neutral.
Any thoughts and what I should check next?

Thanks in advance.
 
In neutral it will wind up on 2 of 4 cylinders.---Your test means nothing.----Bulb on hose does nothing when motor is running.-----Check for strong spark on each cylinder.----Check flywheel key.----Is timer base rotating?---Both carburetors opening up ?
 
I can not see , hear or feel your motor.----It should not be hard to figure out what is wrong on these elegantly simple motors.---Checked for water in the fuel ?----And stop winding it up in neutral to 4500 RPM !!
 
What fuel pump is on this motor ?----VRO in service and tested ?---Or mixing at 50:1 in the fuel tank ?-----Overheat horn tested ?-----Water pump impeller checked / replaced ?
 
VRO is intact and working. I have not tested the overheat horn, but it has great water flow through the system, so it's not an impeller issue.
 
That's interesting because the water is flowing strongly through the line that comes out of the block and exits through the bottom of the cowl.
 
But that water does NOT flow through the engine !-----If there is a blockage inside the engine the telltale will still flow strongly !---See post #2
 
GREAT spark in all four plugs- so I'm at this point it must be a fueling issue?

I am very confused as to the water cooling the engine. As I understand it the impeller pumps water up the water passages and cools the engine. Water then exits partially through the drain hose that comes out of the engine block. Is that correct?

If I have a blockage in the engine I'd need to tear down the top end, correct?
 
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