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Water tube stayed in place at the top when I removed the lower unit and lined up perfect when reinstalling the lower unit. water is coming out both pee holes. but, water is also coming out from the hole on the front of the gear housing where the shift rod goes thru. I don't recall water ever...
I just installed new water pump kit on my 2002 Mercury 25hp 2 stroke. It seems that there should be more pressure coming out the top pee hole. And should water be coming out the hole of the drive shaft housing(mid) unit where the shift rod passes thru to shifter.