Longrange4u, this is all good info you are getting. Once the drive is off, reach in the back of the boat and spin the gimble bearing to make sure it is still good. It spins firmly but should be smooth. If it is bad you will feel it catching or loose as you spin it. Grease it and the u-joints.
Also look at the drive coupler where the splines of the outdrive goes into it. The splines should have a somewhat square tip on them like the outdrive shaft and not pointed. If they are pointed then it is getting worn out and now is the right time to replace it. I would hate to see you install your new motor and go testing just to have the splines stip out and have to pull the motor to replace it.
The part number of the plastic sleeve is 23-806922.
You can find just about any part # at this web site and order from there also. I have ordered many parts from BAM Marine and they do a good job.
http://www.mercruiserparts.com/

Good luck!

I too swapped my 454 for a 502. I was swapping MPI engines which is a little different but worked great. Its easier than you think. All the previous info is exactly what you need to do. When you get to prop selection I tried many. The best I found was a labbed 25 Mirage Plus. Should put you 72 to 74 mph GPS. It's a lot more fun to drive with the 502

Wow guys great info... another question... there are two Mercrusier external water pumps. I purchased the later model (newer version) and it bolted right up to my pump fine... then upon closer inspection I have the older version. After much inspection and comparison, other then the housing shape and being a one piece instead of two... the function looks the same and it fit fine on my housing... do I need to buy the older two piece version?

no.....

Hmmmm ok... got the engine alignment tool. Valvecovers came in, new marine stereo came in. Going to install the RR and valve covers next weekend, maybe the exhaust, and may even go as far as set the motor in...

Ohhh I bought a used WPM hydro steering setup for 850$ too.. that is soon to go on as well.

What are you going to do with the 454?

If you didn't already get a flywheel Summit has the one you need for $114.00. That is the one I purchased for my new 502 Crate engine that is externally balance. The flywheel is GM PERFORMANCE BRAND.

Gonna rebuild and sell the 454...... forged pistons, tighten her up some and make some of my money back that I have sank into this money pit. (I will also be how I pay my buddy for helping me)

Vandeano.... thanks for the info but my challange is that my engine was supposed to have been internaly balanced....

Well good... I got a WPM hydro steering set from ebay for 800$... that saved me some bucks on my budge build (is there such a think with a boat?). We are in an exercise preparing to go back to Iraq at the end of the year so it is hard to put more time into the build... I talked to the builder and a couple others. Because I have the original Flywheel with the motor, with the original harmonic bal... It has been suggested that I use that. What do you guys think? I looked at summit for the flywheel you talked about van but it is for external balance... didnt say anything about being nuturalized. Whats the diff in a flywheel and flexplate?

To my understanding it should be at neutral. Flexplate I think is for a automatic transmission hook up. Not what u need.