Paul not that i dont already know............. but who did the set up on your drive , and Paul loose the trailer because down the road you just might experience some more problems $$$$$$
Drive setup was basically made by the manufacturer in 1988, Marlin Boats, Tigard, Oregon. I have the original Hot Boat test on the 89 model somehere.
When Dan, down at Gun Lake, made the switch from the 260/Alpha to the 502/BravoI we got the template from Mercury for the original boat, (it was offered with either the 330 Bravo, the King Cobra, or the way this one came with the Alpha), and lined it up over the Alpha holes as recommended by Merc. That was in 1994, so the drive heights were still fairly low.
This time I puked an engine, so Ben did the rebuild with a new block etc. We decided to go with an XR for the strength, the one I bought had a bad set of lower bearings, so I found the 2" shorty Imco and put that on with all XR inners. I was originally concerned about raising the prop 2" for coming on plane etc., but Ben said the drive was so low 3" short would not be an issue. He was obviously right, and now everyone is still saying higher.
I don't know if I'll make any changes currently to the X, but who knows. I'd rather get the BT completely done first. (Or buy a race boat and finish it), before I put a lot more time and $ into this one.......
It runs pretty strong for a fuel injected 502, and it actually handles well as long as you are very careful on excessive trim up or down. It wants to run with the drive up maybe 1 or 2 degrees, 3500 RPM to WOT, and that's it

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And yeah, I'm careful with that trailer, I've replaced all the bearings, brakes, surge actuator, etc., and still stop every 20 miles or so and feel the hubs to make sure the bearings aren't overheating.