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Yep, the smaller gearcase will hold up, but only if water is kept out of the gearcase….There is no margin for error here…And the failure mode, like everyone says is the lower driveshaft bushing and its mating surface on the driveshaft. The extra power of the 10hp seems to attack this area quickly when the oil leaks out and water leaks in….Sure, all gearcase will eventually fail when this happens, but the small gearcase on the 10hp will fail much more quickly….And, like Lindy says, good used parts are getting hard to find….
I too love the 58 10hps, regardless of this issue, I just check the gear lube prior to every use. These engines also suffered from piston/wrist pin/rod wear, and I find it strange that I do hear many complaints like this on the older 10hps with the larger gearcase. Perhaps the 58s wind up a bit more than the older models, enough so to affect/create more load than the plain bearing/bushing set up can handle, but this is just a guess.
Nonetheless, I still love these engines…