Sounds like it needs a good flushing out and a new impellor.
What about the rubber by-pass outlet at the front of the engine. Is any water running out of that? It often blocks and just squeezing it between your fingers usually clears it.
With a 3.3, having a clutch, there REALLY is NO excuse, Jimi for not running it in a bucket of fresh before gannin the waa haem! D'ya ken?
Jimi- I know you now have a manual, but for the benefit of any one else looking for a Mariner or Mercury Outboard manual, tho I have published it before, a useful link is here:
Try backflushing the engine. There is a plug on the underneath of the crankcase waterjacket for this purpose. I did mine and restored full flow. /forums/images/graemlins/ooo.gif