Barry,
A very good question indeed...
I served an apprenticeship as a young man and learned a lot in that few years of time. I worked on trains, ships, tugs, subs and most other things with medium to very large power plants. I was scolded more than once for not following the manufactures instructions, when installing and torquing fasteners. This very lesson taught me that most manufactures specified dry or wet (lubricated) torque settings. So, this is still part of my routine.
Outboards have the same detail in their manuals. Honda, and Tohatsu, for example, usually spec dry or wet. If in doubt and there is no technical guidance, I have to assume that the torque is dry. If the torque is dry and I lubricate the fastener, then I reduce toque 15 to 20 percent. I have torque chart at my bench for most all fastener general torque specs.
So, the things that I do use a toque wrench for on an outboard include fasteners for the block, rod, crankshaft, head and flywheel. Most other fasteners I tighten in a normal rotation sequence by feel. I also use tool that are the correct size for the fasteners, so that the fasteners are not artificially over tightened.
Steve Baum
Homeport of Portsmouth, VA
OSPREY (Ex Mister Sea) 2000 22 C-Dory 2010 - Sold 3/19
OSPREY (Ex ADITI) 2007 26 Cape Cruiser 2018