Re: Stumped…AGAIN, 1962 OMC 10hp

[Don]

This is a tough judgement call for sure. The gel seal works well, but only when properly prepped and applied. That crankcase has a few studs instead of bolts, did you pull those out when you were cleaning/prepping the block halves? Like I say, the gel seal works well, but will not tolerate improper/incomplete prep. Even the factory couldn’t get it right for a few years. The type M is much more forgiving.
In either case, it is extremely important to be sure all the old sealer has been removed, later service manuals mentioned using a black light to check for traces of gel seal. Then you must check the mating surfaces to ensure they are flat. Oftentimes, there are slightly raised surfaces, especially around the internal crankcase threads. Needless to say, extreme care must be taken when resurfacing raised surfaces. Removing any meat from the actual mating surfaces will cause the crank bushings/bearing to bind. Once you have cleaned the block halves, you could assemble the crankcase halves "dry" and check the outer mating surfaces with a feeler gage.
The problem here is deciding whether or not disassembling that powerhead is necessary. You mention the engine idles great, which would indicate that the crankcase is sealed fairly well. If it were mine, I would follow Mumbles’ advice at this point. I would hate to see you pull it all apart, re-prep and seal, only to end up with the same condition.
You mention it idles great, OK, but where is the low speed needle set? If it is set excessively rich (more than 1.5 turns out), this may indicate a sealing problem that you are solving by richening up the needle.
Like I say, my 58 Sportwins all leave a pretty good oily sheen on the water when idling, I am always thinking there is an actual fuel leak, but never find one. I don’t know what would cause fuel to seep out past mount bolts and the shift lever, but am just guessing there is excessive back pressure inside the exhaust housing at idle, so I am questioning whether that relief (under the SS plate inside the ex hsg) is carbon plugged. Did you pull that cover off during the rebuild? You engine has a thermostat, is it getting up to temp?
You are pretty frustrated at this point, like we all would be, might be best to put it aside for awhile and do some other projects…..