Your going to need to get more info from your engine and here is what you need:TechMate Pro marine diagnostic tool, marine code reader .
Also check drive lube level in reservoir.

For easy alarms its allways good to have any smartcraft gauge like eco monitor or so.It show direct what alarm is it.
Without you can only scan the pcm with rinda software,techmate pro or merc software.
Michael

That alarm could be caused by a dozen things. The outdrive isn't one of them. The only sensor for the outdrive is low gear lube.
Buy a Rinda Techmate scanner or take it to a pro to have it scanned.

Snoozer - I totally agree with getting the scan - I don't have one but it sure makes sense. We have a 226 Cobalt 7.4 mpi and I was getting an alarm that was driving me crazy - I check fluids, connections etc-- as stupid as this sounds it was an alarm for water depth. Somehow I activated the low depth feature to something like 15 ft of water - Talk about feeling dumb !!!!

all the very best

3pointstar

^^^^ This.

Examples

2004 33 Outlaw 496HO's. Had beep every min, anything off idle was solid beep. Scanned showed IAC code. Replace it and was good to go.

2005 382 fastech 525's. Sold beep anything over 3000 rpms or so. Scanned and end cause was bad water pressure sensor.

Yes, check easy stuff first before spending dollars on a scanner.