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I have an 18 ft outrage with a Merc 135 2 stroke Saltwater Series. When I run the engine in low RPM in no wake zones, I get a continuous BEEEEEEEP and the light goes on for the left rod with a circle and waves inside the circle (not sure the name of this, and looked online everywhere for what it was called). Its not the gas tank at 12:00, its not the oil can at 3:00, and its not the 6:00 symbol either.
When I pull the boat into neutral, sometimes the light goes off, and I can kick it into gear again and the beep goes away. sometimes the beep doesnt go away and I have to turn the engine off, turn it back on and the beep is gone.
I've looked at the temp gauges on my boat and they are all reading in the first quarter towards "C" so I dont think its an overheating issue.
The continuous sounding horn is for overheating. But if the engine is not overheating, your problem is most likely a defective alarm module (the black box that controls the alarm system). I had this happen on my Merc 150. I think it is about a $175 part, and a relatively common problem.