Het Beer, what condition is the base gasket in on this motor? There shouldn’t be any fire or exhaust breathing on the shift handle shaft or anywhere in that area. It all goes down the rear exit area as does the cooling water. Any hot exhaust in the front chamber indicates a possible exhaust leak as any exhaust or water in the front chamber has to come up from the bottom. I believe water does come up the drive shaft tube though to cool it and bleeds out externally at the top and bottom. Is there a mouse nest in the gearcase where the underwater exhaust comes out? If this motor has been used in salt water, the inner housing could be corroded thru allowing an exhaust leak.
With the shift handle getting hot when the motor is idling on a boat could be caused by back pressure from the water level causing an internal exhaust leak somewhere but if it cools down when the throttle is opened up, there is no back pressure and the exhaust is actually being scavenged out the lower gearcase opening. Something to think about.
Do you have the proper one year only 305324 base gasket for it as the ’59 and later 308385 thermostat motor gaskets have only a small hole in them for the water to enter the motor while the ’58 gasket has a large cutout. The later gasket would probably work though.
In this pic you can see the exhaust outlet at the bottom with the stainless plate in it. The plate directs the bulk of the exhaust out the bottom but allows a small amount to exit thru the idle relief port along with the cooling water. Check to make sure that all of the small passages for the idle relief system aren’t plugged. Your motor might have some small holes drilled thru under the plate. The water outlet is the large hole at the very bottom of the pic.
Here’s the ’58 QD 19 base gasket
and the ’59 and later and ’57 and earlier base gaskets.
