Welcome to Team Talk and the Mastercraft family. Looks like you have a great boat that needs a little TLC and some updating. From a mechanical viewpoint, you need to change out the automotive carb to a Marine carb. A marine Holley 4160 is the proper carb to have on there. I just bought a used 4160 in need of rebuilding from a TT member and rebuilt it for my boat. madcityskier was right on with a full tune-up. I also just added a Pertronix electronic ignition and updated coil.
Good luck with your work, and don't hesitate to ask any questions.......Lord knows you will have plenty of them.
Have the good guys at SKIDIM send you a catalog. This will become an invaluable resource, as well as a great source for parts and information. Also head on down to your local Mastercraft Dealer (if there is one nearby) and introduce yourself. If you go, bring your boat....everyone wants to check out a Stars & Stripes. Even a work in progress.