I would fix it up as these are great little motors and worth having run again.
Here are my thoughts: *First go to the Mercury Marine website and get a Mercury factory manual. You want the one for all outboards, 1966 through 1974, C-90-68647, last I checked it was 35$. Best investment ever. Seloc is good too. *check the compression, over 100psi is ok, 110psi is pretty good, less than 100psi indicates problems. *check for spark and if your fuel system is clean (you are already doing this) *check your lower unit oil for water. *if you need parts, check out ebay, or Kenyon Power Boats, Grubbs Marine, Seaway Marine, other bulletin boards like this one, or go visit your local outboard repair guy and ask who in the area has a mountain of old outboard parts in back of their shop. If necessary, you can find a new powerhead or lower unit or whatever you need.
My buddy and I dug his 1972 9.8hp Mercury out of a garbage can, fixed it up for less money than you are willing to pay, and his son is still running it! I am betting yours is in better shape than his was.