Yup that’s the same case I have. I think you’re right about the grommet. There wasn’t one in there when I got the motor so it must have been lost and no one replaced it. I ordered one today and will hopefully have it Friday and test it out. New water pump parts are on the way with a new housing that has the anti cavitation plate on it which mine does not have.

Do you think the grommet has to be flush with the lower unit or is there a gap between the water channel and grommet?

So I replaced the entire water pump. The grommet that was in place was all the way at the top of water tube at casing edge. I made sure it was seated all the way up but it still looked like it wasn’t really doing much. I used a fresh piece of thick rubber hose with braiding and cut it to correct size to sit at bottom edge of water tube and place an o ring around it as well to seal up space around the water tube. I filed the flat top of the lower unit and exhaust case and when I mocked them up before rebuild I noticed the edges near the water tube had a significant gap and allowed light to pass through. This may have been overlooked during last install. I used fast setting burgundy form a gasket around entire lower unit edge, carefully keeping sealant to a minimum and keeping out of water channels. This closed all the gaps and sealed the two pieces together very well so far. I marked the driveshaft so I would know if it was being pushed upward during install. I vented the gear case while inserting driveshaft then closed vent afterwards. Re assembled lower unit and service tank tested. Was a difficult startup as usual unfortunately and requires starter fluid. Once running, water pumped immediately now that all gaps and dead space was sealed. I upgraded the pump housing to the newer version with anti cavitation plate. The new impeller plate was much thicker gauge than the previous one that was bugered up. I used a new impeller as a precaution. I was so thrilled to see water pumping.

Is there anything I can do to help motor start up without starter fluid? The shroud does not have an inlet for spraying starter fluid and is a pain to dismantle on the water. Would a carb rebuild help? I’m wondering if I’m flooding the motor while pressurizing the gas tank? How many times should I be pressing the pressure button in tank before start up? Once the motor is warm it will start right up. Rough low idle and no can’t seem to get high low mixtures to the point where I can idle her down real low to ideal shift idle. Compression is near 120 on both cylinders.

As always thank you everyone for their insight! You all helped me get this thing going again!