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OK, well the first thing to do is be sure the water tube is properly aligned with the impeller housing. Water tubes get bent and misaligned making proper installation/alignment near impossible. You can do this by removing the impeller housing from the gearcase and slipping it up into the water tube…The bottom of the impeller housing should be even with the bottom of the exhaust housing when the tube is securely into the grommet. There is a problem if you can’t align these pieces or the impeller housing must be pushed past the bottom of the exhaust housing to engage the grommet. You may just have to rotate the tube in its upper grommet to align it properly with the impeller housing….
I guess I should have begun by saying it is always helpful to use some emery on that water tube, getting rid of any corrosion and sanding it smooth. I would then liberally apply some sort of grease to the bottom of the water tube and inside the impeller housing grommet….
The bottom of the water tube is usually cut off at an angle from the factory, making it easier to start it into the grommet easier. Someone could have cut off a longer water tube if not…Trying to install a water tube that is cut squarely at the bottom is surely more difficult…Sharp edges on the bottom of the water tube will usually catch on the grommet and mash it down into the impeller housing.
Finally, I recommend using an assistant to help get that gearcase back up into the exhaust housing, be sure the upper driveshaft oring is installed and the splines are lubed with OMC moly lube before beginning. I would go ahead and shift the gear lever into forward and push the shift rod down into reverse before beginning as well…It is pretty tough to align the water tube and work the shift rod into the brass connector all at once, you can make the shift rod connection after the gearcase is installed…You can use a flashlight or your fingers while the assistant is slowly working the gearcase up to guide the water tube into the impeller housing…You will probably have to rotate the flywheel with the plug wires removed to line up the splines as well. Generally speaking, once everything is aligned, you should be able to push that gearcase all the way up against the exhaust housing by hand…There is a problem if you have to use the retaining bolts to "draw the gearcase up into place", most likely the water tube is not properly aligned or it is crushing the impeller housing grommet.
One final note, it is probably best to check the shift rod connector bolt threads before reinstalling the gearcase, you will need a new OEM bolt if its threads are buggered up…Don’t forget the little star washer. Sometimes, I try to spread the brass connector open just slightly before gearcase installation to ensure the shift rod will slide up into the connector without too much fussing. I would just snug up one or two of the gearcase bolts, then connect the shift rod….This makes it easier to pull the gearcase back down if you drop the shift rod link screw and washer inside the housing while attempting to connect it…
Once the gearcase is reinstalled, you will want to check shift adjustment….Improper adjustment due to improper shift rod connections will result in partial gear engagement, clutch dog jumping, leading to big buck repairs….