The 5 degree idle timing is set as follows:

Set the throttle so that the scribe mark on the metal cam is aligned dead center with the center of the throttle roller.

It is at that setting that the idle timing should read 5 degrees. If not... the adjustment is made via the linkage rod that connects from the vertical throttle arm to the metal cam.

The "Full Spark" advance reading is either done with the engine running in gear at full throttle with the timer base up against the spark advance rubber stop cap, OR via the method below.

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(Timing At Cranking Speed 4°)
(J. Reeves)

NOTE: If your engine has the "Fast Start" feature", you must disconnect/eliminate that feature in order to use the following method. The "Fast Start" automatically advances the spark electronically when the engine first starts, dropping it to normal when the engine reaches a certain temperature.

The full spark advance can be adjusted at cranking speed,"without" have the engine running as follows.

To set the timing on that engine, have the s/plugs out, and have the throttle at full, set that timer base under the flywheel tight against the rubber stop on the end of the full spark timer advance stop screw (wire it against that stop if necessary).

Rig up a spark tester on the #1 cylinder plug wire. Hook up the timing light to the #1 plug wire. Crank the engine over and set the spark advance to 4° less than what the engine calls for.

It's a good idea to ground the other plug wires to avoid sparks that could ignite fuel that may shoot out of the plug holes. I've personally never grounded them out and have never encountered a problem but it could happen.

I don't know the full spark advance setting your engine calls for, but to pick a figure, say your engine calls for 28°, set the timing at 24°. The reasoning for the 4° difference is that when the engine is actually running, due to the nature of the solid state ignition components, the engine gains the extra 4°.

If you set the engine to its true setting at cranking speed, when running it will advance beyond its limit by 4° which will set up pre-ignition causing guaranteed piston damage! You don't want that to take place.

No need to be concerned about the idle timing as that will take care of itself. The main concern is the full advance setting.

A fellow member from one of the various marine forums suggested having water supplied to the water pump (flushette or barrel) simply to provide lubrication to impeller. A worthwhile suggestion I thought, and entered here.

Be sure to use your own engines spark advance settings, not the one I picked out of the air here in my notes.
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What spark plugs are you using and at what gap?

With all spark plugs removed, does the spark jump a 7/16" gap with a strong blue lightning like flame... a real SNAP!? Note that the 7/16" gap is important.

Still with all plugs removed... What is the compression psi of all the individual cylinders?

Is this the linkage arm I should be adjusting?

If required, yes.

spring

I now thing the problem may be that the throttle spring broke and the previous owner added this spring as a jury rig. does that sound reasonable?

That spring does not belong there, nor does any other spring.

It appears that the previous owner put that spring there to pull the timer base back to a retard position. Get rid of it.

The spring assembly is a large coiled spring at the bolt area of the vertical throttle arm that is connected to the throttle cable at the bottom and to the timer base at the top.

I suspect the previous owner installed that spring due to the timer base sticking as the throttle is applied (1 of 4 clamps too tight?)... check it.