- The engine runs very rough at idle. If I open the engine
compartment I can see the engine moving quite a bit and hear a big
"tok" "tok". I was told this was normal, however still concerns me.
Any ideas?

I've got the same engine in my S2. This is normal.

- Also, sometimes, after the engine first starts I can see quite a bit
of oil coming out the exhaust pipe and quite a bit of smoke (dark).
This goes away after a few minutes of operation. Any ideas?

Just before I shut off my engine I rev it up to blow out any yucky stuff.
When I start it up the next time there is usually only a bit of black stuff
comming out with the water & minimal dark smoke. Of course we are talking
about a single cylinder so there will always be some black residue & smoke
out the tailpipe.

- After running the engine for several hours, I notice that my transom
has black oil stains. The boat I have (C&C 27) has the exhaust pipe
coming out the transom a bit above the water line, so I guess any oil
coming out the pipe stays in the whirlpool. Is this normal?

Yep, that's pretty normal. I just try to clean it off when I can.

Good luck,

Frank Wiewandt