I know for sure that it is the lower unt oil. The first thing I checked when I got the boat was the lower unit oil. It was milky and to top it all off the lower unit would not turn because of ice in the gearcase... I bought Yamalube and pumped it into the gearcase, changed the rollup door in my shop, (it was 3 inches too narrow ), and pushed the boat into the shop.
Came back after a week, leaving the motor tilted up on the transom saver and noticed some oil on the ground. Lowered the motor and watched in amazement as the oil poured out over the prop shaft. The prop is off of the motor, BTW.
I had one quote of around $500 to replace all the seals and impeller. I did my 20hp Johnson, together with Boatman, so I am going to attempt this one as well.
Also I need to have the skeg welded.
Check my post on the "other" board in the restoration forum to see what I am up against....