Hi I have the same problem! It is cause by heat generated by the vertical shaft bushing that sits in this area and when the engine is throttled up this gets really hot! And once you slow down, the water comes up and wets it causing it to quick cool. ( This is my humble opinion ) So can the outboard run without this vertical shaft bushing? Only xl and xxl Hondas have these, from what I know other brands like Yamaha dont have the shaft bushing thats why we don't see this in their engines. If you look thru the parts diagram on boats.net of the 3 different length of the honda bf200 and 225, the short shaft model doesn't have this bushing. So if anyone tries installing a new extension case without using the bushing please keep us posted, I'm not looking forward to replacing the extension cases again in the near future.