The tell tale hole should be on the lower pan near the back of the motor. If you take the faceplate and wrap off you should be able to trace the telltale hose down to the bottom of the pan from the water jacket( left side of powerhead).I would first reccommend checking the telltale hose for obstructions, they are notorious for getting a mud wasp or spider nest in them. Secondly, your impeller is a wear item and should be replaced as part of a regular maintenance schedule. Dry worn and cracked water pump impellers can dislodge and travel through and lodge in the passages of your cooling system. This prevents a problem since now you have to pull the water jacket and exhaust baffle from your 46 yeat old motor. Expect to break at least half of the 1/4 20 bolts, unless you carefully heat everything up with mapp gas. Good news though, That is a nice old motor and parts are readily available, even at NAPA, if you will accept aftermarket Sierra. I would suggest purchasing the 1965 and Prior Service manual from Mercury... or used. Stay away from the Seloc and others.Good Luck , Jason