Your 1988 Mercruiser used the Saginaw style steering cylinder assembly.
The steering cable from your helm attach's to the steering actuator valve assembly with a large aluminum cable nut. I believe it fits a 1-1/8" wrench.
This aluminum nut is often locked into place with a retainer. The retainer is held in place with a small bolt.
Loosen the bolt and remove the retainer as so you can use a large open ended wrench to un-fasten the cable nut.
Now... the core of the cable passes through the cable guide tube, out the port end of the tube and the end has a 3/8" pin and cotter pin holding it to the end-yoke and steering lever. Remove the small cotter pin and remove the 3/8" pin.
You will now be able to pull the entire cable out and away from the power steering cylinder and tube assembly. You might have to steer your steering wheel to the left (port) side to retract the core of the cable as so it comes out with less distance.
Steering cables get old, corrode, rust and wear out.
If this is the original cable I would consider installing a new cable.
You can not really grease a cables core in the sheathing.
If in doubt... change it out.
As for the rest of the power steering assembly. Chances are good you do not need to remove the unit unless it is rusted bad and ready to leak or leaking.
The tube that the cables end was sliding in and out of can get internally corroded.
You can buy a wire brush from West Marine which you can attach to a drill and ream out the inside of the tube. This cleans out any build up of salt or corrosion as so the end of the new cable will slide easily after it is installed and greased.
This is usually all you need to do to "service" a steering cylinder assembly.
If you need to remove and repair or replace the old hydraulic cylinder assembly there is something you need to know.
The older units are no longer being manufactured. The unit was steel and would rust. It had two external metal tubes which would also rust and leak. You can no longer buy the metal tubes.
Instead... you would upgrade to the new no-feedback DHB Cylinder Assembly.
The new DHB unit is made of stainless and aluminum.
It will fit right in place of the older unit.
The "thing" is this... your old power steering hoses are SAE and the new DHB unit requires METRIC hoses.
No problem! Mercruiser sells a DHB KIt which includes the new metric hoses which have SAE hose ends to fit your cooler and power steering pump.
The part number is 806034A2 DHB Steering Upgrade Kit $463.90
You can find this part online at http://www.sterndrives.com/merc/driveparts/POWER%20STEERING%20COMPONENTS.html as well as a few other sites or you can check with your local Mercruiser Dealer.
First, remove the two hoses from the valve mechanism using line wrenches.
Your old assembly is held in place with two stainless swivel pin bolts.
One is on top and one is underneath.
These bolts are locked into place with stainless locking tab washers.
You will have to bend the tabs out of the way to remove the two bolts.
I think you will need a 1" wrench and the bottom bolt is very difficult to access
while the engine is still in the boat. Not much room to swing a wrench!
When you install the new DHB unit make sure you bend the tab washers back onto the heads of the bolts to keep them from coming out.
The tube on the DHB has two flat spots. These flat spots need to be vertical or the steering can shudder during a turn.
As for your power steering fluid.
If you disconnect all the hoses the fluid will leak out of the pump.
This will be a mess in the bilge so be prepared to clean it up.
Refill the pump with Dextron II Transmission fluid after all the hoses are installed.
The unit is self bleeding.
Make sure that when you install the new steering cable that you reinstall the retainer for the cable nut and make sure the sheathing of the cable is not tie wrapped or restricted from moving freely.
Check all cotter pins and cross pins for proper installation.
Check all hose fittings for leaks when the engine is running.
Steering from left lock to right lock a few times with the engine running to make sure the cable is properly installed and working correctly.
Please let me know if you have any other questions.