would it be the voltage regulator?

Hey bean, does look like the rectifier. Before you go to a Merc. dealer, you may try and find a rebuilt one. Use to have a 50 merc. that I bought a power pak, etc. that were aftermarket from a local mechanic. These had a written warranty. The merc. oem did not. Good luck.

My cousin almost lost his entire Champion Bass boat on the Amite river because the Rectifiers decided to flame in his 175 Mercury.
Seems to be a common problem with Mercs. His entire back side of his engine burnt up because of those things.

I had a 40 merc on a boat that I sold to my neighbor down the road from my camp. It did the same thing and caught on fire also. Needless to say I felt bad for selling it to him.

Hey mercury does claim to set the water on fire in their commercials, LOL guess now we no how it starts. sorry man i just had to just joking, but i am a yamaha man. check out ebay has good prices on some mercury parts.