Lower unit tilt gearcase

I have a 1978 cobia sportster

I have a 1978 cobia sportster with an OMC 140 I/O with a 400 out drive unit. i took the cover off the lower unit gear case and the oil had water in it. I can't seem to get it back on for some reason. it looks like there is a clutch involved? Is there some kind of pressure that needs to be relieved to put it back on? The oil leak that i had was coming from the shaft that that goes into the gear case. Is that a seal? any info would help

"This was a bad design flaw. Y

"This was a bad design flaw. You can replace the seal, yes there is one the shaft passes through. I have a new kit because it was cheap but I probably will just leave it. It doesn't take long for all that weight on that shaft to trash the seal. Here is what I did...I drained the tilt box and then pumped marine grade grease from the lower drain hole until it came out the top, reinstalled the plugs and never have had a problem since. Some how that grease helps with keeping the water out too. Two seasons now, just checked it and no water."

"thanks bud
all i would do is

"thanks bud
all i would do is pump it till its full,and replace the gasket on the cover and call it good?"

"The o-ring seals the cover. T

"The o-ring seals the cover. The gasket on the cover isn't a gasket at all. It's a shim and it's very important - if the cover is installed without the shim it will put extra load on the clutch and these tilts have enough weaknesses as it is....
I always put 2 shims myself....and mine are packed with grease as well....
If you press down on the drive, the cover might go on easier - don't draw it in with the bolts - it will break."