First, Thanks for all the advice and concern.
After doing alot of research and having our mechanic friend Nick over we discovered a failed water impellor.
Our synopsis is that this caused no water to run through the engine and the engine got very hot. This melted the plastic muffler and caused the water in the muffler to leak out into the pan below our engine. It also caused the exhaust to fill our engine compartment and then come out through our cabin and cockpit access.
I believe that a temperature alarm did go off and I mistaked it for an electrical problem. I turned the key to silent the alarm but the engine was still over heating. A few wires became disconnected during this over heat which probably caused the RPM guage to stop working. Once the engine got too hot it stalled/seized.
As for the stuck gear, after manually turning the engine we were able to get it shifting again. However we noticed that the engine would turn fine while in nuetral but not while in forward or reverse. This might mean that there is still remains of our dinghy tow rope stuck on the prop. We are discussing swimming down there to investigate!
Just to let you guys know. Our 3GM30 is raw water cooled only. We do not have freshwater/coolant or a heat exchanger. We do not have a spark plug but we do have decompression levers.
So all this because we made the mistake of leaving in our water impellor after I inspected it a few weeks ago.
So far we have changed the water impellor, removed all water hoses, removed the muffler, removed the thermometer and taken apart the exhaust manifold. We also checked both oil levels and there is plenty of oil and no water that we can see. And we unstuck the transmission.
As you can see we arn't wasting anytime and want to get back out on the water asap!
Our upcoming plans are to replace all the hoses, put in new exhaust manifold gaskets, install new thermometer, install new muffler, repair broken electical connections and change the oil again. We will also be able to change those two pesky hidden zincs now that the exhaust manifold will be removed. And last we might dive down to remove any rope from our prop.
The engine compartment is so tight and uncomfortable and the back is accessed through the cockpit. We just call it "the hole". Looks like i'm going to be spending some time in the hole.
Atleast I have some help, hand me a wrench Nala.
It sucks that this happened but again it's all for the best that we learn now and not while cruising. Just like the Garmin problem greatly increased our knowledge of electrical systems, this problem is increasing our knowledge of the diesel engine and building our confidence!
For more pictures of dirty metal, CLICK HERE
The lead pic is from last year.