The only thing I can think of is that maybe the flywheel wasn't seated correctly, but I doubt it as I did torque it down to spec which should seat it. I didn't check the runout on the flywheel until I removed it and re-installed it.

Seems like you would have starter trouble too if the flywheels were "out of round" so to speak.

How far off is "way off". Like an inch? or much less..

Can you rotate the crank with the alignment tool inserted , or does it bind and stop? If true at the coupler, how can it change?

Have you rotated the engine out of the boat ?? to see if its true.......maybe its a gimble issue

Much less. Enough to where it is very difficult to insert the alignment tool.

I have not tried that. I agree, it shouldn't change.

Yes, I have done that. I suppose it could be the gimble but it's only a couple years old (all new transom assembly) and the gimble bearing feels good and I can move it within the race using the alignment tool.

Ican see having a misalignment between engine an gimbal but thats going to add wear, not change when only engine is rotated. If you take a dowel and taper it so it moves freely inside gimbal bearing and rotate crank while someone watches that would show how much movement you have , but im sure something is warped or bent.

When you are pulling the line up shaft out are you knocking the gimbal bearing out of alignment? They pivot. Sometimes you have to bump them around to get them inline with the coupler.

^^^^^^ insert the tool into the gimbal bearing and wrench it up and down and back and forth then line it up with the engine and push it in all of the way. pull it back out about 3 inches and push it in hard. It should bang into the gimbal bearing. This should center the bearing.
see if this makes it easier to pull the tool in and out. Then rotate the engine to see if it helped.