As you likely already know, this is a "dockbuster" or "direct reversing" engine. No Neutral. But if tuned properly, it'll fire off with just a flick of the key and idle like a dream!
I would test for spark before putting fuel or water to it. Likely after sitting for 10 yrs the points have hazed-over. This has a dual-point distributor and the dwell between the 2 sets of points has to be 90 degrees for best operation. There are templates for the degree wheel needed to set the dwell, we can help with that as needed.
Probably a good idea to pull all (6) spark plugs, spray some lubricant in the holes, along with some in the carbs, and pull it over by hand to distribute the lube before cranking with the starter. Better than rolling it over dry.
Only the bottom part of the distributor, held on with (4) 1/4-20 bolts to the distributor drive, has to come off when servicing the distributor. Use caution as the distributor cap may have screws with locking tabs which must be bent down before removing the screws. The side-contact in the cap has to be removed before removing the cap, otherwise you'll break the contact. The rotor pulls off hard, but the phenolic is fragile so don't pry on it & break it. Replacements are expensive! I usually grab the rotor with gloved hand & give it a stout pull. There is a special tool for this but pretty hard to get your hands on one! The plug wires & coil wires screw into the cap and the coil wires just insert into the coils just like a car.
There are 2 rubber flappers in the lower unit, one comes into play when the motor is running in Fwd, the other diverts the water flow in Reverse. Since the impeller rotates in both directions, Mercury did some very clever engineering to ensure proper watering no matter what direction. If the rubber is hardened, the flapper won't seal (or won't open properly), and water pumping will suffer. So it's something to check out when servicing the impeller.
The paint looks really nice but I'm sure you'll want to put some decals on it.
Here's a couple of places with quality reproduction decals for your MK78A:
http://www.americanoutboard.com/deca...er_mercury.htm
http://www.nymarine.ca/1959MCDEC.html
HTH & keep us posted on your project...........ed
p.s. you might want to breeze thru this extensive thread of a fellow boater's '58 MK 78 renovation, a lot of good info that might help you get yours back on the water:
http://forums.iboats.com/forum/engi...-to-revive-a-1958-merc-mark-78-super-marathon