there is an upper seal at the top where the water pipe goes into, if u see water coming out there the seal is bad. you will probably have to pull the powerhead to replace it. have u tried reverse flushing the system? remove lower unit and attach garden hose to tell tale tube and let it flush anything out the leg.. u can also remove the water pipe and spin the pump a few turns with starter and water on muffs to clear that too.. blow out the water pipe as well and reconnect the lot.. as long as tell tale is flowing water u are good.
maybe u are not inserting the water pipe properly into the powerhead? can be tricky getting a good seal there (insert water pipe loose into powerhead first, THEN connect lower unit, that way u can be sure u have a good seal at the top) - with the motor locked on the tilt stopper, the pipe usually hangs on its own without touching anything (when u have it in the rubber seal firmly)..
try all that and see how it goes..