Water cooled voltage regulater
 

I have a 86 with a 170 I/O. The voltage gauge would show 16 volts intermittently. Now shows 16 all the time. If I turn on the bilge and well pumps it goes down to 15. The regulator is water cooled. I have been told the reg is about $500 if I can find it. A conversion kit was recommended. Has anybody run into the same problem?

Fairly common issue, and yes the conversion kit to an actual alternator is the reccomended route to take.

If the rest of teh system is in good shape(and I emphasize good shape) then you may want to look at the replacement regulator offered by rapair/cdi electronics, it actually turns off the feed voltage when its charged enough, rather than run the excess to ground like the mercury one did.

http://cdielectronics.com/Portals/0/...Regulators.pdf