I have a Baja with the 496HO, and after two years I had a similar problem. Mercury eventually replaced the wiring harness, which finally cleared the code. Today, two weeks after that the same problem, though I think this time it might just be a loose connection that needs to be tracked down.
Supposedly my problem was an error for low seawater pressure, but it really had plenty of pressure. It wasn't getting a good ground, and there was a service bulletin to remove some paint where two surfaces joined so that it could get proper ground.
The service manager at my marina said they have been having quite a few electrical bugs with the 496 motors.