1992 mercury 2 stroke 4 hp gear case oil problem

[carogator]

Bought this motor with water mixed with oil in gear case. Seller had just replaced oil to hide the problem. I have removed lower unit and pressure checked. Air escapes around the shift rod, so much that if it leaks anywhere else it might not show. Just where should I look for the point of leakage? It only takes about tem minutes in barrel for almost white mixture.