The KH-7 was as Dave B said, a one year motor. It was really a transition motor from the Kg-7 to the Mk-20. The power head is very much the same as the KG-7, including the same AJ-32A carburetor. This was the first year for full gear shift, so it was very popular. They initially were built with too small water pumps, which led Mercury to recall them and install a larger pump. The modification also was to add more holes in the water inlet of the lower unit. A lot of service techs turned these into pin cushions as they drilled too many holes and weakened them. A lot of the lower units cracked around the bearing carrier nut. They also used a S11K forward bearing and different forward gear then the later Mk-20 and Mk-25 motors. Like Dave said, these are great motors, and the pinnacle of the green tank Mercury motors. I have two of them.
Here is my first one at the show at Tomahawk, the second one has not been restored yet.