Hmmm, well you could simply drain the gear lube and look for water, or burnt lube. If those conditions are present, then I would look into the shock. I’m assuming you had the gearcase off and did the water pump, was the gear lube OK then?
You mention the engine had no power when he brought it back to you, and I’m assuming you were running it in the tank like you did when you fired it up originally. Did the engine develop more WOT power when you originally tested it?
You mention checking the exhaust, I am again assuming you pulled the exhaust cover off, is this correct? If so, was the inner plate OK, not pitted or leaking? I was leaning towards a water leak, you might try running then engine at WOT for a few minutes, then shutting down and inspecting the plugs…
Does the engine start and idle OK?
Like everyone has mentioned, could be something as simple as messed up throttle linkage, this is easy enough to check and should be done first.
Simple things first, recheck ignition and spark.
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