I know very little about Seagull engines... let alone how to overhaul one; but needs must – I do a lot of boat fishing in the summer on a local loch and have been graciously given an outboard engine. However, there's a snag...
I think it is a 40 Featherweight EF; here's a picture:


It was used on an Avon dinghy at sea and one night in a storm, it flipped over and the top section of the outboard was submerged (probably for several hours). It was then put in a shed and left there for several years (5+ ?).
It is as you'll expect, seized. I have taken the top cover off :

I figured I'd have to get at the coil and points and clean them up, to do that I understand you need to turn the flywheel back or forward until the piston is fully back... and one pair of hands holds the flywheel while another knocks the spindle from above with a hammer...However the flywheel will only rotate back and forth over maybe an inch and a half and no more – on looking through the plug hole – I don't see any movement of the piston at all... So I can't guarantee the piston is in the right position to remove the flywheel...
So, my first question is how do I free up the piston? Do I for instance undo the apparent bolts that are at the front and back – one being close to the words 'do not remove' which is on the back of the cylinder block... Or is there another way to resolve the situation?

I tried squirting a copious quantity of WD40 in and leaving it but to no good...
The prop only turns a bit against its spring...
Any advice will be greatly appreciated!
Cheers
Tony.