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1976 Merc 20Hp Leakage?

Your question has been asked hundreds of times.--------It appears to be normal discharge from a 2 stroke engine.------If you feel there is a gearcase leak then a pressure test is in order.----Was there water in the gear oil when you drained it ?
 
Actually racerone I didn't redrain lower unit to check on lube condition, I noted this brownish fluid oozing from that crack and assumed it could be exhaust oil from idle, wasn't that sure. I'll dump a small amount of lube out of the unit and get back to you of the condition/color. I noted there was no water coming from the square holes at rear below power head, should there be? The water pump streamer was working fine so I'm assuming good pump pressure, I'll get back with my findings.
 
racerone on my original drain the fluid came out as gray gear lube, I've gone out and drop the drain plug to get a sight check this is new fluid with a small milk stream in it. I'd imagine I rushed the drain and should have let it runout all night or used a flushing agent.
I'm satisfied that your correct in the unburned oil from exhaust, but shouldn't it have been blackish in color instead of tan? Or maybe it was just the idling not under load that caused this color?
 
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