If you are just wanting to change your engine you only need to unbolt the Flywheel cover, Take off the lower inspection plate, Exhaust, Wiring, Water hose, Motor mounts, The engine will slide forward then up and out
What you need to do to the replacement engine is a whole other thread by it self.
Being a older AQ series drive this is what you should do.
Remove the entire outdrive as it will make getting to the 6 bolts easier. Lower unit first, Then Transmission, Then the center section. Then the steering yoke and helmet.
Disconnect the engine from everything except the Flywheel cover. Carefully try to remove the 6 bolts at the rear. If they come out and the clamp ring comes off the engine will now slide forward and up/out
If the 6 bolts will not come out you will need to unbolt the engine from the Flywheel cover(FC) and take the engine out. Once the engine is out you will see 6 bosses where the 6 bolts are on the inside of the FC. You will need to apply heat to each one to remove the bolts one at a time. Once the 6 bolts are out the FC will now come out.
There are two bearings and 2 seals that you need to replace in the FC that hold your Primary Drive Shaft(PDS) Will be BIG BUCKS if they fail and being this old why take the chance The bearings and seals are under $30. You will also need to replace the 2 big rubber sealing rings.
Once you have it all ready to go back in you can either put it in as one piece or the FC first then the engine
I had to put my FC in first then the engine as it takes less space in front of the engine as together its about 4 in to long for the room i have.
Once you have the engine/FC in you need to do a alignment. Do not tighten the 6 bolts or MM bolts just snug them up for nor. Its easy, only done once. Do a google search for it and you will find a howto AQ280 Engine alignment.
So now your engine is aligned and bolts are torqued you can start putting to outdrive back on.
At the top of your Transom shield where the Steering yoke slides in there are two bushings you need to change and on the yoke there is a seal. The cost is under $30 and changing them will keep it water tight and no slop at that pivot point. Make sure your yoke and steering arm are center to each other. Have a helper push up on the steering yoke as you tighten the inside steering arm
The center section goes on first and you might want to replace the Hose connection if it is eroded and a new Exhaust bellows Nothing really special with this just fallow the manual and its done but dont forget the shift cable.
With 2 new "O" rings reinstall the lower unit and Torque to spec.
Next is the upper Transmission. Check the U-Joints if you feel they are good reuse em but i would buy new ones just to be safe and change them.
New U-Joint bellows are a must as well as new "O"Rings Now put the Transmission on Torque to spec and be sure to align and tighten all hose clamps
Fallow the manual and do a pressure/Vacuum test. If it passes fill with oil and you should be good to go.
Forgot to mention between the transmission ans mid section there will be shims under the bearing. DO NOT LOSE them as you need them to go back just as they were.
Probably forgot to mention something but look at teh manual and you will figure it out.
http://www.michiganmotorz.com/flywheel-1986-later-engines-12¾-diameter-p-154.html
http://boatinfo.no/lib/library.html#
http://www.marinepartseurope.com/en/volvo-penta-cat-7743320.aspx
