Now for my problem, I cannot get it to accelerate past about 9mph and 3k RPM while in gear. It starts first try every time, idles well and will rev great in neutral. Also it seems to have descent pull in reverse but I usually wouldn't do more that 3k RPM in reverse anyway. 

I have replaced both fuel pumps, regulator, fuel filter and of course siphoned 10 year old fuel from tank. 

Normal ignition components are new also. Cap, rotor, coil, plugs, wires and even the distributor.. I have also checked and set timing. I have tried running it with the oil and water temp switches disconnected to rule out limp mode and saw no change. There was no check engine (assuming the bulb isn't burned out.) The light that says not to operate if it stays on over 1200 RPM goes out at 1200 like it should. 

I'm running out of ideas. My next plan is to test fuel pressure and I ordered a code reader today to see if that gives me any leads. 

Any other tips or tricks would be greatly appreciated. 

There is an anti siphon valve at the fuel tank that might be cutting off fuel flow but I would check pressure and verify before chasing anything else.  It is mandatory on a Fuel Injected engine to perform correctly.

Mark

This is not making sense to me.  There's no way the boat at 3kRPM is only going to go 9mph unless you have prop slippage (tranny issue).  3kRPM should be somewhere around +/-30mph.  

There is a gear press-fit into a bell housing in the PCM 1.23/1 tranny.  On my '96 it just worked itself loose over time.  I pulled the tranny apart not knowing that it was supposed to be press fit (tight) since it slid.  When I showed it to a boat tranny repair shop, they said that was the problem.  Plenty of RPM, but slipping (it did make some noise).  Wasn't worth the hassle to try to rebuild (I was paranoid I'd screw something up and I didn't have tools to press bearings, etc.), so I just opted to get a new one from SKIDIM.

That's a $2,500 replacement, so maybe your issue is something that's less expensive.  But unless I missed something about the 9mph @ 3kRPM, your prop/tranny is slipping.

BTW, the replacement tranny from SKIDIM is a model 80 (replaces the 40).  A tad bigger, but fits fine.  Also, comes with new damper plate, AND a 12" tranny cooler (twice the size of the original).  When I got my '97 project boat and sold my '96, the first thing I got (okay, along with new steering, shift, throttle cables, and Stargazer) was a 12" cooler to replace the original 6".

Fuel pressure is my plan for this weekend, I have yet to look at that anit-siphon but its at the top of my list depending on results of my pressure test. 

Now for the possible transmission slip... That has crossed my mind but the thing that keeps me from chasing it is that the boat just stops revving at roughly 3k. If it was the trans I would think it would keep revving to limiter. Please correct me if I'm wrong. It is also very slow to reach "max rpm" so I think that's why its not faster at that rpm. 

Thanks for input, I'll update with my fuel pressure results soon. 

Agree 100% (great visual BTW  ).  Also, even if the engine just won't go past 3000rpm, the boat has to go faster than 9mph unless there is something seriously wrong with the prop or you have slippage.  If I go in gear and slowly raise the rpm's, I'll be planning well before 2000rpm (haven't checked, but pretty sure it is in the 1200-1300rpm range.  Even if I did it really slowly, the boat is going to plane regardless.

Really good point about the tach.  My '96 tach got spastic and sometimes would show 4krpm when it was at 2,000.  Othertimes it was fine.  My '96 project boat has the same problem.  Fixed it by turning the #cylinders dial switch a few times.  So really good idea to make sure your tach is reading correctly.

While you're down there turning the prop, see if you can see what prop is on the boat. However,you may need to pull the prop since the specs are typically on the end of the hub.

Okay, first, it will not free spin; it does take a little effort to turn (when dry on the trailer), but it sounds like yours is about right.  If you pull it out of the water and spin it, it will spin easier.

It does sounds like a new prop is appropriate.  However, I have to go back to 1500 RPM max.  Since there doesn't seem to be excessive resistance, I think we need to do a few more tests on the tranny, and then turn back to the engine.  

First, what are your RPMs out of the water (fake-a-lake, etc.)?  Or, pull the prop and then drop it in the water and start and run.

If you goose it, does it race up to 5k, or lug?  Also, with it out of the water (or in the water with the prop off), is there any difference between raising the throttle in neutral vs in forward?

I'm going to assume that it's going to be just about the same in neutral or in gear, but sluggish / even in neutral/out of water, which would point back to the engine.

Let us know.