Has anyone ever seen an outboard where the female spline that is machined into the crankshaft strips out? On this motor I believe the driveshaft simply connects into the splined bottom of the crankshaft.

maybe someone can make me smart, or give me some other thoughts - just rebuilt water pump and reassembled ( keep in mind I just bought this and have never run it). It's not pumping water, OR going into gear (it is shifting between F&R in the gear case).

I'm going to pull it back apart and look, but it just seems so unlikely that that would happen and there are no metal shavings anywhere.

Couple other things just popped into my mind -

maybe someone replaced the lower unit with the wrong shaft length?
Maybe someone replaced the lower unit with one from a lower HP model and the driveshaft is a different diameter??

Anyone ever had one of these things? Would like to keep it because it is vintage cool and works with the boat, but am thinking of saying screw it and just putting a used newer motor on it

I don't know the answer, but I know if you post this question on Scream and Fly, you will probably have the answer within a hour.
That is the best site for older performance outboards. Lots of older guys, that seem to have seen it all. They will be glad to help.