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OK. This is going to seem like a really stupid question to most, but I have a 1960 Merc 400 and just replaced the impeller because there was just water "spitting" out of the exhaust which I assumed is where the water out put was. Once in the water I noticed the water was still "spitting" out of the exhaust but then there was a solid stream of hot water shooting straight down from a small hole on the bottom cowling assembly. Can anyone tell me if this is the correct location for the water output?
No question is ever "Stupid" here on W/C, I'm not familiar with that engine but, in "General" water cooled outboard's have what is called a "Tell tale" (that solid stream of water comming out the hole near the cowling), this show's that the water pump is working on the engine. There may be 1 or 2 small slit's at the top of the tower leading into the bottom of the cowling if it's a "Through hub" exhaust. These are the relief exhaust vent's for at "Idle", they spit water too (your model may not be through hub exhuast). Your model may just have an exhust vent near the bottom of the prop, either way spitting water out of the exhuast vent (near bottom lower unit) or relief vent's is "normal". You should be able to hold your finger on the engine head (near spark plug) for a 1-2-3 second count before you have to remove it. That mean's "Generally" that you are running at normal operating temp., and the cooling system is working, check your thermostat for replacement too. Hope that helped, maybe another member has more experiance with that model engine.
I'm pretty sure that model is not a thru hub exhaust. There should be a few holes in the rear of the leg for exhaust and water. For all the info you will ever need on that engine, go to John's old merc website. They are really pros on those old mercs.
Mike