The pic is of an Opti lower unit. You may have a different number of bolts/nuts, but the principle is the same for all Mercs.
First make sure you know which direction your engine turns in when running. Mark it on the flywheel if it's not marked.
Put the engine into neutral.
Remove the trim tab (Green line-bolt accessable from above-may be an allen bolt). Undo any bolts underneath it when it drops off.
Tilt the engine fully if it's on your transom.
From underneath, undo all visible nuts (red lines-don't use a socket
)-remembering to leave one of the forward nuts on a couple of turns. This stops the lower unit falling off suddenly.
Give the lower unit a pull downwards in line with the leg. It should come loose and drop against the last nut. If it doesn't, wiggle the lower unit about by hand-hard(ish) while applying steady downwards pressure.
DON'T HIT IT ON THE ANTI-VENTILATION PLATE.All this will achieve is a broken anti-ventilation plate. If it won't come off,do it all back up and take it to a techie. All you'll do is break it if it's stuck.
Once it's dropped against the last nut, undo that last couple of turns and the lower unit will drop.Don't let it impale you or hit the floor.
On the separated lower unit, undo the impeller housing bolts (purple line-may be more or less than the 4 visible). Lift the housing off. It'll be stiff to move so do it carefully as you don't want to damage the gasket face underneath. This will expose the impeller. It'll probably look like the one on the right-the one on the left is a new one.
Clean up the driveshaft if it's rusty. (red-yours probably will be, and I'd bet you'll need to cut the impeller off with a dremel-carefully and on the opposite side to the keyway)
If it'll come off, lift the impeller off (DON'T LOSE THE LOCATING KEY!).
Clean off the old impeller housing gasket. Put a new one on with a thin smear of grease on it.
Put the new impeller on. To get the housing to fit down onto it, grease the inside with a very thin smear of grease and push it downwards while turning the driveshaft in the direction the engine turns. Grease all the splines on the driveshaft and gear selector shaft
lightly. Too much will make it hard to refit the lower unit.
Refit your lower unit,making sure it's still in neutral and the gear selector rod and the water pickup pipe are correctly located.If it's dropped into gear, put it back into neutral using pliers with a rag inside the jaws. The driveshaft probably won't line up immediately. To line it up, turn the flywheel slowly.
Do all the bolts up and test it...