Oil in water

i am a new boat owner who just

i am a new boat owner who just purchased a 14 ft alumacraft with what i believe is a 1959 johnson 35 hp model number is rd 21 b my question is i have it running and the water coming out of the pee hole is sporadic and there is or was water in the oil any suggestions would be appreciated the motor sat not running for a year and a half

"pull the lower unit and repla

"pull the lower unit and replace the water pump impellor and other destroyable parts like the grommet that holds the water tube. this event will cause you to drain the gear lube in the unit and replace that--the water in the oil may be caused by a deteriorated seal that is letting water into your lower unit--if there has been water in the lower unit, you may have a rust problem to deal with--this should clean up your oily water or your watery oil--what ever you do dont remove the phillips head screw near the bottom of the unit--the two screws that need to be removed to change the lube are both slotted and have large heads on them--"

This is not very clear but I&#

This is not very clear but I'll give it a shot.
The water from what you call the pee hole will increase and decrease if the thermostat is opening and closing.
Reason is the engine is not hot enough for the thermostat to stay open.
If the thermostat is opening and closing at least you know it is working. This is nothing to worry about unless the engine is running hot then the impeller my be getting weak causing it to not have a steady water flow. That would be cause for concern so idle the engine a little higher and see if you get a steady flow of water.
The water in the oil makes no sense. Do you mean there is an oil film in the test tank / water around the boat if you have it in the lake?
If this is what you mean this is normal. It's part of the exhaust waste. If there is alot of oil you may have to much oil in the fuel.
Also check the lower gear case to make sure there is not a bad seal letting the gear oil out and water into the gear case.