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Sorry frank, I am little confused. Is the merc 7.3 this same engine block? Did this engine make it into boats? Is this too much motor for a 23 with jackshaft?
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Same block, but Mercruiser gets the D-Tronic 7.3L motor direct from Navistar, including fuel system and intake. No, it's not too much motor. The D-Tronic is rated at 270 hp, but produces 500 ft lbs of torque, compared to the measly 365 ft lbs of the 5.7L MPI gas motor.
Changing the D-Tronic over to the Ford fuel system and using the Ford computerized controller appears to be a process few have tackled, although one guy claims success, and says he Superchip'ed his motor and uses an aftermarket turbo to achieve 600 hp in a Baha 33' with a B2 drive.
So it can be done, but do you really want to be a trailblazer in this?
This is a case where I recommend the Volvo-Penta.
__________________
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