First: This is the Johnson/Evinrude outboard forum, You'll probably have better luck on the MerCruiser sterndrive forum.
Second: If it's not winterized, and blowing water and oil out the breather shortly after you started it, something in the water jacket broke. Breaks in the ex manifold or elbow will show up as a hydrolocked engine, or rusted tight from water intrusion. Water in the crankcase means the water jacket busted somewhere in the block, head or intake. If you pull the dipstick, see how much higher than normal the reading is. this will give you some indication how much water was dumped in the block before it started puking out the breather.
You can see small amounts of water from the engine being hydrolocked from the exhaust, then those couple ounces of water seeping past the rings into the crankcase. Given the amount of water required to blow things out the breather, I suspect you have a bigger problem.
Third: Tear it down as soon as possible. If the crankcase is full of water, the bearings are not protected by oil, and instead being rusted by water. Chances are the motor is not worth rebuilding, but on the off chance the problem is in the head or intake this will preserve the bottom end as much as possible.
Best of luck
dcramer
