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Most likely its the O ring seal between the upper and lower. The seal was pinched or left out
https://www.mercruiserparts.com/bam/subassembly/30967/1943/220
OK, the drive is installed and you assume its leaking from the water inlet, or you removed the drive and verified its leak from the water inlet?
If this is an assumption, then I would think the leak is in the shift shaft
Always glad to see you comment, your the expert with vp. We all make mistakes and with your current record your hardly ever wrong. All good from my view
I'm sure there can be a good reason but would have to hear it, otherwise there is other things
I've been looking around myself, just to see if I can find something that will work better. The one thing I won't do (as of this date) is get anything with CATs
Get some 3/8 x 16 all thread and cut so they are a inch or so longer then needed.
Remove the bolts on the ends of the manifold. Screw in the all thread, then remove the rest of the bolts from the man. Slide the man off the all thread.
This way you don't have to hold the man
The threads are NPT (national pipe thread)
Meaning, 1/4 NPT means it has a 1/4 inch inside hole
Being only 44HP I would expect a 1/4
Normal is 3/8 for larger motors, and that said, without measuring
With motor warmed up, spray some WD40 at the base of the carb and intake to see if the idle changes any. Can also use a small propane torch and let the gas only (don't light) and move it around the gasket area