Some will argue.----If the leak got worse ,then the risk is water getting inside the motor via carburetors.-----That could reduce the motor to scrap.----So you need to repair that now , if not sooner.
The timing fixture is nothing but a time saving shop tool.-----It is a " dummy flywheel "----If I do not have the timing fixture handy , I lift the flywheel on and off to set the points.
I bought 21 of those 3 cylinder motors at auction one time.----So , yes I have seen it on everyone of them.----I assume you are baffled by your first motor ----Sorry to be blunt.
Remove cover around sparkplugs.----Replace gasket.----Water out the exhaust is normal.-----Shift quickly.----Do not ease it into gear.----So no " granny shifting " on outboard motors !
How did this motor run for you last season?-----Why are you working on / trouble shooting this motor ?----Is it on a stand and in the normal running position ?----Model # of this motor ?
When I got my new computer I had someone from 2000 miles away set it up.-----I would say that if you trust your local shop then pay them to help you out.
On a hose ( muffs ) on a trailer you are not running with a load !!----In gear is still the same as neutral.-----Simply because the prop does not have any WORK to do moving air.