Thank you everybody for your responses, greatly appreciated. This community is invaluable. After getting things looked at my a reputable mercury mechanic, I just wanted to close the loop on the items discussed in this thread.
1. Engine in break-in mode: dealer took a short cut in priming the pump, nothing I can do, just need to run the break-in timer out.
2. Oil not being pumped from remote to primary: not 100% sure the cause, the tech said he ran some air threw the line going from the block to the remote tank. Oil started flowing after that.
3. Sound of compressed air: was unrelated to the air not flowing. Don was right, ended up being bad air injector o-rings. New o-rings on 2 injectors and its all set.
4. Still oil dripping from pump, original dealer claimed was "normal" and "expected" when its in break in mode. One of the lines off the back of the pump was twisted, kinked, and leaking where it attached to the pump. New tech removed everything, and nice and neatly reattached all the lines. No more leaking.
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