no need to replace  flapper valve  before… doing  the hose   soapy  air leak tests  from nipple to tank      easy stuff first  !

Getting involved here late, so don’t want to “muck up” the process asking questions that have already been asked/answered.  Sounds like you have ruled out the tank by trying two different tanks, both of which operate fine on a different engine, correct?

You are probably getting ready to pull the intake manifold to check those black rubber pressure check valves.  I would check the pressure nipple/hose/connector first/again though before going into the intake manifold.  Oftentimes, those pressure nipples got “soldered closes” when converted to single line/fuel pump systems.  Make sure the rubber hose isn’t damaged/plugged, the same goes for the air outlet prong on the engine’s fuel/air connector.

Like Bill says, the intake manifold isn’t a big deal on these engines, try removing the outer cover only, there is no sealer used on the gaskets, the rubber pressure valves are clearly visible once the outer cover is removed.

Again, like Bill says, not uncommon for the water to leak out around the shift handle.  The shift handle bushing is small and subject to wear creating an easy exit for exhaust/water.  I wouldn’t worry about it until the next time the powerhead is pulled.  You mentioned the engine would not shift into gear, did you check the shear pin?

JohnRude wrote:

Thanks for the suggestions. For added measure, I’ll make sure the connection holes from/to the tank are clean. I already replace fuel line and air line hose.

Correct about the shear pin. It was missing entirely. I didn’t check the lower unit at all except to change the oil before working on the top end. The old oil was dark and stormy but I’ve seen worse.

I’m starting a new thread about another mysterious problem.

Just to be clear, this engine needs to be mixed at 16:1, regardless of the oil used.  True, oils have improved over the years, but not all that much.  This engine uses “plain bearings” on the large rod/crank ends and requires plenty of lubrication, or the crankcase will ventilate as pieces of the rod blow through it.  When in proper tune, these engines barely smoke at all, even at 16:1.  I realize that even some of the OMC literature states these plain bearing engines can be mixed at 24:1, ignore that.

you can  also remove the sinterd filter and  just add an external one in line with the fuel supply to the carb.  I have seen them with drilled across to allow fuel to pass