Thanks, I am sure that it is the lower seal, it was just leaking a little bit, but now it has a inordinate amount of oil leaking from the exhaust and an orifice (approximately 1/8") hole just above where the seals should be located. It may be a couple of days before I can work on the engine and I will let you know how the progress is coming.
The engine has a fuel problem which is where I started with this project, replaced the diafram in the pump and it appears that the diafram pump is not working properly. The engine will crank, but then it runs out of fuel. If you take the line going to the carburetor off at the pump, you can squeeze the bulb and fuel pours out of the output line from the diafram, but if the engine is cranked with fuel in the bowl, and disconnect the line, then it is not pumping fuel of any quantity. It is almost like the vacuum is not operating the pump. If you squeeze the bulb continuously, the engine will run at a moderate clip and then if engine is opened to planing speed, the boat will travel a short distance and it will shut down to idle. Also, if you continuously squeeze the bulb, it is fairly hard, but if you quit, then it becomes soft. Could not find any fuel leaks between the fuel tank and the carburetor.
Do you have any ideas?