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My 74 outrage 21 has twin merc 115s with hydrofoils on both engines. I find it porpoises badly at any trim setting other than all the way in, and the steering gets really hard one direction. I checked the position of the anti-cav plate, on the keel side the anti-cav is level with the hull bottom, and on the outside it is about 2.5 inches below the hull. Should I remove the hydrofoils and/or raise the engine?

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Both.

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how many holes should I raise it?

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It depends somewhat on what props you are using but if your Mercury 115s are the four cylinder early 1990s models you should raise the motors at least two sets of bolt holes.

If you are using good stainless steel props, you can raise them three sets of bolt holes.

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I just took off a pair of 13x19 merc SS props and put on a pair of Solas Emita aluminum 13.25x21 props, the 19s let the engines rev to 5700 rpm, with the 21s it tops out at 5100rpm. The engines are early 90s 4cyl.

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Solas Amita. Cheap Taiwanese aluminum crap.

I am unaware of any 13" x 19" stainless steel propeller made my Mercury now, or historically. They used to make a 13-1/4" x 19" Quicksilver branded QSS prop, part # 72762A. Is that what you used to have? If so, they were grossly out of date.

I recommend a pair of 13-1/4" x 19" Stiletto Advantage 4.25s (or the Turbo 1 equivalent).

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I have a twin engine 1971 Outrage 21 Ribside, the predecessor to yours, but basically the same hull. Since this hull requires 20" engines for both single and twin installations, with twins, especially the slightly longer shaft L4 Mercs, you have to mount them ALL THE WAY UP, on the 5th set of holes.

If you look in the photo model section here, you can see my boat. Even with the shorter shaft L6 Merc 115's, I have them up all the way.

Besides the Mercury Laser II props I normally run, I have a set of Mercury BlackMax aluminum props, and they are remarkably good propellers. If you want to run aluminum, I highly recommend these, as they perform quite well on mine.

With my installation, (although I have 100 fewer pounds on the transom) I get no porpoising at all, regardless of trim position. I use hydraulic steering, but once raised, you should trim the engines out to the neutral steering torque position and the mechanical steering should still perform well.

You should also get rid of those worthless and speed killing hydrofoils. My guess is with these improvements your boat should run around 50 MPH. You are going to need either 21" or 23" aluiminum props, or 22" Laser II's.

Here are some other photos/videos of the boat for your reference:

http://smg.photobucket.com/albums/v42...rage%2021/

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I got a chance to go fishing today, caught 40 keeper dungeness crabs (limits for the 4 of us) I took off the hydrofoils, and raised the engine 1 hole, so it is up 3 holes off the top of the transom. I thought it was all the way down, but it was already 2 holes up. The boat handled betterm picked up 1.5mph and used less fuel.

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Sounds better, but I would go all the way up and put the bolts in the 5th (bottom) set of holes. If you find that is too high, you can always come down one, to the 4th set.

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I think I was getting a little cavitation at medium speed, when barely on plane at 2100rpm in close 3 ft swells it sounded different and the engine rpm went up and down around 200 rpm