Evinrude 5hp no water stream

[lisfisher]

Hello all, I am working on 1995 Evinrude 5hp for a friend of mine. There is no stream of water from the telltale. Troubleshooting this all day and it appears to be a mystery. New impeller was recently installed , also confirmed this by pulling the lower unit and checking the impeller, it's like new. Also removed powerhead, pulled entire water tube out from the grommet, all is clear in the water tube and cooling channels. I don't think there is a thermostat on this engine but not certain. I am at a loss, I really don't know what else to check. Any suggestions??

[boats.net]

Did water pump housing show signs of getting too hot, melted housing? blow air back through telltale to see if plugged up.

[lisfisher]

The pump housing is all metal. After tearing apart several times over the last 2 weeks, I am stumped as to why there is a rubber o-ring that sits on top of the metal wear plate and underneath the impeller. There is also an o-ring that was sitting on top of the water pump housing. Neither of these o-rings are shown in the schematics for this model. { E5REC } So now I am not sure if they are suppoosed to be there or not. Only one person worked on this engine 2 years ago, a marine mechanic, so maybe he is used to using o-rings from working on bigger engines and put them there in error, I don't know. Anyway, water is now pumping in all but idle/ nuetral and occ***ionally at lowest throttle setting in forward gear. I am stumped. Below is a list of my findings after several teardowns:

Telltale hole is clear all the way through
Pulled powerhead, all cooling ports are clear
Engine compression tested good, at 120
Mud wasp nest was discovered inside the 2 exhaust relief holes on the backside of the engine, just above the cavitation fin/plate
Cleared mud nests from exhaust holes and water is now pumping 90% better, except for neutral or reverse.
Just steam coming out in neutral
Tried again last night, water pumped through ok in neutral. Put it into forward gear, still good flow. Went back to neutral and flow stopped.
Running in 55 gallon barrell
Backflushed via the port underneath several times.

Still wondering if these 2 o-rings have something to do with this.