re-power??

[sls233]

I have a 1976 233. Originally it was powered w/ a 351 and omc. Around 1998 the original owner repowered with a 5.7L and cobra. When I got the boat a few months ago the engine block was cracked. I purchased a remanufactured 5.7L, and began the install. I took it to the local shop to have the engine aligned. The mechanic told me he thought the outdrive was installed too low when the repower was done. He explained that the "thingamajig" part of the outdrive, sorry I can't remember the name of the part (it is a horizontal fin just above the prop), should align on the same plane as the bottom of the boat when the outdrive is in its lowered position. Well, it doesn't. It's about 1.5" lower than the bottom of the boat. He explained a number of problems this might cause. The guy I got the boat from gave me an original OMC manual for installing this outdrive. In the manual there is a chart that shows instal specs for installing the outdrive at +1", +.5", 0, -.5", and -1" (these measurements represent the difference between the aformentioned "thingamajig" and the bottom of the boat. Whoever did the outdrive install made some marks in the manual in the -1" sections, which makes me think he had a reason for installing it at that height. But he left no explanation. The manual gives no info on why to select which elevation. ANY IDEAS would be appreciated!