I have an Oday 25 and we just replaced our long shaft
Mercury 9.9 2 cycle which looked exactly like your set up. Ours was on a retractable mount so it sat a bit lower and could be tilted up out of the
water when not in use. A retracible mount allows some water
depth adjustment
1. 9.9 is plently for a 25 foot
boat, and that looks like a 20" long shaft
2. The
exhaust being above water has no effect except
noise
3. Its only important that the
cooling water keeps coming out.
4. You should not have a problem with this set up unless the
propeller comes out of the water when driving into waves. It appears your set up should be OK for up to a 3' chop.
5. Don't put a lot of
money into an older 2 cycle. Save it for a newer 4 cycle with a bigger
propeller and a extra long 25" shaft. We just replaced the 9.9 2 cycle with a 6 HP extra long shaft (25") and it will drive the boat even in a 4' chop without coming out of the water. In fact it works better than the 9.9 did except not quite as fast in clam water.
I see by the preceding posts that you've been getting good
advice. Hang in there