That is my thought. First thing that comes to mind is that the Mercruser engine has 8.8:1 compression, and most stock engines are 8:1, that alone will drop the HP output. My feeling is it doesn't have the power to handle it because its not right. I will leave that to the mechanic to tell me this.captainmaniac wrote:1) timing is set right
2) you are getting the right advance on the distributor
3) without load you are hitting desired RPM, so throttle cable is probably okay
4) you said that your carb is wide open at WOT
Fuel issues? You should have seen some symptoms of that with the old engine.
So... brand new engine? My money says whoever did the rebuild (or build) f'd up, and the block or components they used (possibly not marine) just doesn't have the balls it should have. I'd be telling the manufacturer/rebuilder it is a warranty issue and they need to either get it working right or refund my money. Just because it's new doesn't mean it was built right. Even if your low compression on a couple of cylinders is related to heads and unrelated to new block, I don't think low compression should account for 25% reduction in overall output.
I need to call the previous owner and see if he has paperwork on it. I could have sworn he gave it too me, i remember seeing the price of the invoice for the replacement. I just cannot find it. If its under warrentee that would be the road to go.