Well.....It's been a while but I have had good results. To summarize - the prop and shaft were all good. The cutlass was worn in such a manner that the engine was low. The cutlass was worn on the bottom end facing the bow and the top end facing the stern. I took one mount off and it was pliable and seemed fine so I figured I'd take my chances and realign with the old mounts.
Once I replaced the cutlass and centered the shaft going into the shaft log, I found the engine needed to be raised approx 1/4". I adjusted the mounts to accommodate, aligned coupler to .010" and bolted it back together. I wanted to install a flex coupler to help the situation however there isn't enough clearance to do so.
Put her in the water several weeks ago, fingers crossed, the vibration and cluncking are gone!! Let's see how long it lasts!
Thanks for all of your help and advice!!
Oh - I can't seem to find the post with the link to all the Hunter 326 manuals! I thought I bookmarked it but if anyone has it please reply! Thank you all again!
Smooth Sailing,
Ken