I have an '85 that has a split gearcase too. Ray Neudecker, a Yamaha guru on Scream & Fly advised me that eventually it would let go and spit out its guts so I'm keeping it for a parts motor. The steering pivot on that motor does look gnarly. There is supposed to be an anode that bolts to the bottom of the transom brackets and goes under the coiled hydraulic line. From your pictures it looks like the PO didn't put one on which might explain the corrosion.
I'm curious exactly what motor you have. Can you read the ID plate? If it says "Special" then it is a V6 Special and is 220HP and should have a computer module on the back of the block. Otherwise I believe the biggest motor Yamaha made in '85 was a 200HP and it would just have 6 coils on the back of the block. If you have the "Special" then be aware that you need to run at least 91 octane fuel in it. Also, do you know what carbs it has? There are Teikei single float and Nikkei dual floats that were used back then.
If you decide to sell let me know what you want for it. I have a buddy that is looking for a not too expensive motor for his boat. Since I have experience and a good stockpile of parts for the older Yamahas he his leaning that way.
Steve P.
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