I bought a project boat(2001 Tahoe Q6, 4.3l), I believe the block is cracked due to freezing. I also noticed oil dripping out of a small hole on both sides of the front of the outdrive, about half way down. Does anyone have an idea what would cause this, or where I should start looking? Could this also be some kind of freeze damage, is that even an issue on the outdrive?
My thoughts are the vertical drive shaft seals. These are a weak spot on the Gen II.