Bill - yes I installed the key. I've removed the gear house a couple of times now and rechecked the impeller/key/rotation and other things.
yzf125 - I'm sure I have the rotation correct. I am in the process of adding another post asking if I have the correct water pump parts for my outboard. I am having trouble inserting multiple attachments to that post, but I have a photo of the impeller housing with impeller installed.I just tried to attach photo here but I am getting same error (might be problem with the file compression I used...I don't know yet).
gm280 - From what I can tell, I have the water tube inserted into the pump. I even bought a new seal. I can tell by the slight resistance I encounter as I push the gear house in place (I hope that's the resistance). As for water coming out of other places, I can see pressurized water coming out of what appears to be 2 drain holes in the front of the exhaust housing. I don't know if that is normal or not.
Thanks to all for the replies. I started a post relating to no water out of the tell-tale pee hole got not replies. I thought maybe it was because I was too specific with my model of motor and others were not familiar with it (91 Merc 115 outboard). I have more details of what I have been doing with that post.