The 20amp is normally for ignition.
Start disconnection things like the coils and switch box. Then see what blows the fuse when things start getting reconnected
Things settle over time and this is the reason for inspecting alignment.
Having marks on the top and very little on the bottom I would adjust the front mounts down 1 turn and try again
Looks like your real close, the the bar should go in and out with only using 2 fingers each way.
When your adjusting the mounts, have you been turning each up or down the same number of turns each time?
Warranty is always roll the dice, might be worth it for the motor but not the hull. Motor is not an option so I would pass
So long as the old gas is out and filters changed I would just follow the Merc break in as the manual would show
There is nothing wrong with your system other then working on it, or finding parts. Can get new cables made to what ever length needed.
The new style holds the drive without a lockout and has a built in pressure relief in case something is hit. Do admit your style will protect the drive from...
I would say your low pressure pump is the issue
Its either loosing connection or there is a restriction between tank and pump
The motor may run with the low stopped but then the HP pump has to pull fuel thru low and the aeration starts
While the OSO post was for a different year and size motor, it was for the same part number 49956
Searching for 49956 at BAM it comes up with many motors, even for the newest 3.0 CAT MPI. Scan thru the list and I see 5.7 for your years.
https://www.mercruiserparts.com/49956-screw
For bearings pickup a digital caliper and measure, inside, outside and width. With this you can look up bearings
https://www.lowes.com/pd/General-Tools-Instruments-6-in-Digital-Caliper/50175967
It should be 1/2-20, see post 6
https://www.offshoreonly.com/forums/do-yourself-boating-budget/310098-whats-oil-drain-plug-size-1995-mercruser-454-mag.html
Do agree, the Stickys are messed up
Best to do warm but cold will also work. If you find a cylinder lower then the others then would need to warm motor up to verify it doesn't change
Remove all plugs, open throttle wide open. Unplug the connectors from the coil, or pull the kill switch...