88 150 Yamaha 2-stroke, OVERHEATING?

Hello nice to meet you all, I have just purchased a 88 yamaha and after about 10 minutes of on and off(attempting to fix fuel problem) with muffs on my remote throttle started screaming at me and wouldn't stop, so I shut the motor down, looked around didn't see anything out of the norm, so i tried to start it back up and it began missing awful with the alarm still going off, is that a cylinder drop fail safe built into the motor or have I done damage? I have a green circle on the guage when the alarm goes off an arrow points at it. There is water coming out of the t-tale, don't seem as powerful as it should, Thought it should be more like a pressure washer when you hold the handle down without it started, but it seems gravity is getting ahold of it a tad to quick and it looks more like a pee stream. Please someone point me in the most cost efficient direction so i can get to boating.......

Thank You

Well I have found out that the green indicator is part of the the precision mix oil system, why would someone put an alarm on something if the oil is full, not empty, anyways may be a malfunction with the sensor itself, can i disable it if i use premix anyways?. When the system activates for the oil will it make the motor sound like its missing? And make it impossible to rev? Thanks for all the help guys...oh yeah by the way how warm should the water coming out of the motor be? And should the fuel filter only stay about a 1/4 the way full? Sheesh bet u can tell im a newb.....Thanks for the help

[jb123]

change waterpump and housing, thermostats and PRV parts.

Thanks for the help, I took the boat back on the water today after a tune up and it performed much better, boat only begins to get hot when idling through wake zones, maybe thermostat? Other than that the only problem i have now is I can't plane the boat completely out without it kicking out of gear. I dunno if i have a bad lower unit, or the props coming out of the water, it will only do it when i try to trim it up to where the guage indicates level. Will operate fine with the prop trimmed nearly all the way down.