After hearing different suggestions from this posting and discussing them with the mechanic, we have parted ways. I believe he was the problem (not interested in working in tight quarters with an old motor). this became apparent when he started challenging you guys. yes I cancelled his check and yes we are not on good terms as of this correspondence. Now on the the future. Another person will check it out next week and offer his opinion. He will get the full back story. We will decide on the next steps.
Racerone - you bring up a great point about the impeller. However I have come to the conclusion why 5 didn't fit. I don't think the guy knew what he was doing and wasted time and money. I am rethinking the process regarding my next steps. it maybe I'm more long term cost effective to replace the sail drive with an outboard. My area doesn't seem to have experienced people with this motor especially a 1982 model. they also baulk at the tight working conditions. Maybe it is time to move on. if I go the outboard route (and pull the saildrive - I might just leave it where it is and take off the prop) I will most likely put it out for sale. Decisions! Decisions! Thanks for the input. I'll let you know.