Short answer..... NO!
The transmission is the part that you removed the top cover from.
You will want to completely remove this.....
but this part ONLY for now!
Once out, it will look like this.
Again..... NO need to remove anything but the transmission ONLY at this point!
The area that has likely locked up, will be the Main Drive gear and Bearing Box.
I hate to direct you away from ME.com, but I spend considerably more time on the BOC, than I do here.
I have put together a Volvo Penta AQ series
Q's and A's on the BOC Vault.
You will find info pertaining to transmission removal, PDS bearing replacement, and so on.
Pay particular attention to my mention of the use of HEAT when removing fasteners.
Post back here with any questions.
As I said earlier, I provide service for these drive systems via shipping to/from each other.
I also have several good 4 cylinder lower units.
I can offer these cheaply because quite frankly, the market for a 4 cylinder lower unit is soft.... they just don't wear out!
However, this excludes water damage, as appears to be the case with your drive.
Feel free to send me a MarineEngine.com forum PM. We can set up a phone call if you'd like.... even if only to help walk you through this.
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