That engine has a blind bore, so no headgaskets. Sorry for the bad news. The Merc 500 50 hp was flywheel rated, and actually produced about 35-37 hp at the prop, which is how all ne ob's are rated. Rebuilding the engine is easy IF the cylinder only needs finish honing. Most machine shops are not willing or equipped to bore the pre '88 inline 4 and inline 6 Mercs.
On the other hand, There's a guy I know in Fairplay SC who will rebuild your powerhead for under $1G if the block is still good. All he does is inline Mercury OB's
Email me if you want his contact info.
My email is
fgough@tampabay.rr.com
__________________
Common Sense is learning from your mistakes. Wisdom is learning from the other guy's mistakes.
Fr. Frank says:
Jesus liked fishing, too. He even walked on water to get to the boat!
Currently without a SeaCraft 
(2) Pompano 12' fishing kayaks
'73 Cobia 18' prototype "Casting Skiff", 70hp Mercury