Bottom right hand side is the water pump. By the red arrow. 

I didn't know that. Is that a good motor for sale?

The pony motor started however it won't run at full speed. To make things worst the pony motor clutch engaged and the cat motor spins also how do i disengage the clutch so the diesel motor won't turn until the pony motor starts?

Neil do you have a picture of the cover or where it is located?

note you need to use wire cored plug cable not silicon suppression. and crimp on metal ends the modern stuff doesnt work well with these old magnetos.

clean the spark plug mating surfaces and threads bad contact equals bad spark take the mag off and clean its mating surfaces too rub them lightly with 2 b pencil and reinstall while its off check the timing gears for correct position they can be put on 180 degrees out.(the graphite improves contact)

check the valve timing although if it was running properly before mag failure it should be fine unless someone has stuffed with it too. check the valve tappet clearance adjust to spec.

are you sure you have the throttle and choke levers in the "right" position they are different to what you might think. and each engine has it favourite spot.

ive had the pinion engaged when starting once the pony fired the main stopped turning as the throw out released.  I then engaged the pinion and clutch as normal after the pony had warmed sufficiently. it doesnt hurt any thing its just harder to pull over the pilot via the rope.

note these do have a clutch brake if you push the clutch lever forward the brake stops the pinion spinning so ring gear engagement is smooth the pinion is engaged when the pinion lever has no weight on it. the pinion lever is in front and underneath the clutch lever

Pony stoped and the pinion wont disengage now not sure how to disengage the pinion.

The pony motor runs for 30 seconds then dies not sure what else to do rebuilt carb still not running for more than 30 seconds.