Those symptoms are typical of either an upper main bearing seal leak or an intake leak.
I have seen/experienced that on a number of portable Merc's (I personally own two 9.9's and a 15 - and these are these models are the bulk of the ones that I service).
Your's is right at the age where the rubber on the seals is getting quite old or the gaskets are giving it up.
There is a couple things you can look for to try and determine if one of the two "potential" issues exist that I have noted.
Take a look, as good as you can, under the flywheel (without pulling it) soon after the motor has been running for a bit (but after it cools enough you don't burn a finger
). You can rub your finger up under the (lip/rim whatever you want to call it). If it comes back somewhat "oily" - think of giving your finger a shot with some WD-40 - that kind of oily, then you probably have a shot upper main seal.
If that's nice and dry, the second thing to check is the intake gasket. I'm not talking behind the carb, the "intake" gasket on the 9.9's is on the side of the motor back near the "head" (which really isn't a head in the typical sense).
To find the intake, from behind the motor with the hood off (so you are facing the prop) it's located on the right hand side, behind the shift/throttle linkage (about the midway point).
The pic below is point out the the three (3) bolts that hold intake cover on (gasket is under that cover). The model has been converted to "remote" so the linkage may look a little different if yours is a tiller, but should point you where to look.
You can remove those three bolts and get a look at the gasket underneath. I have replaced quite a few of these (plus main seals) on alot of mid/late 80's models in the past couple seasons.
