Can't run past idle speed

[LSU42]

I have a 2 cycle oil inj 25 hp yahama. On the lake yesterday after running for about 30-45 min wide open, my motor all of a sudden dropped RPM's and would rev up and down without mounting any power. It would only run at idle speed. Also when in neutral when I would attempt to inc the throttle it would rev up and down. Things of note, red light indicator on, motor didn't seem excessively hot, tell-tale working, new water pump installed about 6 mo ago, oil in resevoir, gas line bulb not not firm. After fishing for an hour or so started up, initially no light on and got to full throttle for about a minute or so, same thing happened again.

Where to start? fuel problem? oil injection? Why red light on? Thermostat problem? Is this protective mechanism as so not to overheat motor?
Thanks,
Chad

[Baby Blue]

Is the red light indicator a temp light? I'd replace the thermostat to start. Very inexpensive part and sounds like it might be the problem.
If the engine cools for a few hours does it run fine until it heats up?
BB

[LSU42]

I'm not sure if it the temp light. I assume so, it is the only light on the motor, I guess it could be a low oil light. I think it is a 95' model and is manual start 25 hp oil injected yamaha. If anyone is familiar with this particular motor, it is a red light indicator right next to the choke.

As for running fine after it has cooled, not so much. Let it rest an hour or so, ran fine for about 2 minutes then back to the RPM reduction and indicator light on. However, today flushing it with the hose it ran fine. I know that is much different than in the water, though.

If I ran mixed gas in it and it ran fine, this would confirm or at least suggest it to be an oil infector problem, right? I just don't want to go putting a new water pump on if I don't have to.

How likely for a thermostat to be bad? They are pretty simple devices. Is there a way to check them without replacing them?

thanks
Chad

[Baby Blue]

If it runs fine with the muffs on I'd say it's the thermostat. They do go bad just like in cars.
They are usually easy to get to and cheap so it's best just to change it out.
BB

[boats.net]

The red light on front engine cowling is the low oil warning. Need to check to see if oil level is low, good clean oil no water, or oil tank sensor may be bad.

[LSU42]

Pardon my ignorance, what are muffs?

Where is the oil tank sensor and how do I check it, or do I just change it?

thanks for your input thus far, appreciate it

[captful]

Check to see that the water intake in the lower unit is not restricted by trash, or leaves, or mud