The upper water tube grommets are probably melted and collapsed. You will have to pull the powerhead for this. The good thing about this is that you have an easy time of replacing all the fuel lines and doing the carburetor if you want to while the powerhead is on the bench. Grease the shift linkage and clean out the 27 years of crud. Fairly easy job and almost all of these little engines need this. Almost every single engine I purchase for re-sale has this issue. I do it as standard practice now.
It is a very easy job if the engine is a freshwater engine. Six powerhead screws, three pan mounts, shift linkage, fuel lines, kill switch wires, choke knob, and remove the starter. Have a 3/8-16 nut handy to thread onto the starter bolt to keep the assembly together.
This engine had zero sign of an overheat. They mushroom out at the base and close up almost completely at the other end.
You will need two grommets and a powerhead base gasket.