Mercury 60 HP Alarm Question

I just purchased a boat with a 1996 Mercury 60hp. The motor idles fine and smokes with start up and at idle speed, and the oil level in the sight glass is dropping at a fair speed. The Pee hole also shoots water strong enough to poke holes in the lake. I am getting an occasional weak sounding alarm that comes and goes. It will start to sound if I am at idle for too long or at a slow speed but will go away. If the alarm sounds when going at a slow speed but will go away with acceleration.

Can Anyone through some ideas my way as to what is causing this?

Thanks,

Is the little red light coming on when the alarm sounds? I am assuming its a four stroke?

No it’s a 2 stroke and at this time there is no warning lights or even gauges. The only warning that I have of any kind at the time is an alarm. I plan to put an RPM, Temp and H2O pressure gauge on it sometime but it has been running since 1997 without so it hasn’t been a top priority and I have only had the boat for a week.
If it makes any difference, the guy I got it from removed the thermostat for some reason so it should be getting fresh cold water all the time.

Oil injected? It premix?

That is the same motor as mine. I think I was told the only alarm that was on it was a low oil alarm and a water temp alarm. Someone did not mess with the oil injection pump did they? On mine the alarm souned once when I got little zebra mussels stuck in the wter outlet but that stopped the water flow.

It is oil injected and the motor is smoking in the exhaust well and the oil in the sight glass on the front of the motor is dropping appropriately.thanks for the replies and keep the brainstorming coming

I would start by putting the thermostat back in. Check all electrical connections and make sure there aren't any wires that may have been worn through shorting out .