Water optional... You WILL be replacing the impeller RIGHT.. Just go ahead and pull the LU off.

Compression test done at wot with ign disabled.

I'd leave the lower unit on until you do the compression test.

No immediate need to get the lower unit off if it has bad compression.

Yes I already have the water pump, thermostats, house barb nipples on order, today will determine if I'm getting head gasket as well.
Doing a compression test with the thermostat housing off the block should not effect anything correct? I know it's only 8 bolts but I don't feel the need to put them on to do the test.
Correct me if I'm wrong?

Nope won't matter at all

Okay guys, compression numbers as follows 120, 118, 113, 118...So to say I'm amazed the numbers match my compression from last week is an understatement.
Now it brings me to a dilemma...do I pull the heads and try to get this gunk out? Unless I put the head gasket on wrong I assume I can't screw up the compression. Just seems like I should let it be, after all I'm not sure this gunk is there from my recent overheat or of it's been there since I've owned it.
Dilemma two, of course I want to put in thermostats but since they weren't in there from the previous owner I'm not sure I should, for testing purposes right now...thoughts?
Warning horn didn't work when the tan wire was grounded and I ran hot lead direct to the warning horn so I think it's the horn that's toast...guess I gotta source one of those.
And I get to try my hand at replacing the water pump which I knew from the get go. Any tips disconnecting it from the linkage?

Try another gauge as compression on that engine should be up around 140-145.

did you test at wot? If not the numbers will be low

(wide open throttle)

How do you test at WOT? If i move my throttle lever on the control box out of neutral it won't crank
Never knew you were supposed to test at WOT, interesting

the throttle has to be wide open, otherwise it is like trying to take a breath through a coffee straw.

Depending on your controls you should have either a lever to open the throttle at idle or a button that allow the throttle to be opened without putting the engine in gear.