Ayuh,..... Welcome Aboard,..... The lower unit needs to be dropped to change the impeller in the raw water pump, as I believe it's shot to overheat that badly,......
As for the shiftin' problem, the lower shift cable runs tight to the exhaust y-pipe, 'n I imagine it melted from the...
Ayuh,.... Welcome Aboard,..... That, ^^^, is where I was goin' with my comments,....
Vortec heads have tiny combustion chambers, 'n really jack up the compression ratio,....
Ayuh,..... Not sure on yer Volvo, but generally speakin' that pcv should be just an open elbow to vent the crankcase,....
The carbon black is because yer carb is afu, 'n is runnin' waayyy to rich,....
Ayuh,..... Welcome Aboard,..... What is the bolt pattern on the wheels,..??
5 on 4, 1/2" is pretty much the current standard,.....
4 on 4" can be found though,....
Ayuh,..... It's more likely the rings are shot, 'n yer motor needs a rebuild,.....
Do a compression, 'n leak-down test to see what's goin' on with it,....
