i went through this repair recently... and prior I ask an old mechanic, that i try to pull advice out of now and then... he switched over the Mercury sales and doesnt deal the OMC much anymore and all he wants to really do it wrap boats and sell motors ha ha...anyway, he mentions that depending on what hole in the side of the case the fluid is runing out of can lead you to which seal is bad.... not sure if thats correct.........i had bad seals in both the prop and driveshaft housing....it was tricky reading the instrustions on resealing the prop shaft bearing housing..,..i think before 95 they only used 1 o-ring... on the post 95 units the carrier had 2 o-ring housings.... found that out reading my 95 manual while i took the 97 LU apart! then they say apply triple guard grease to the o-ring, and install, then they say put gel sealant on the outer dia of the carrrier housing!!!!!!!!!.......like...over top of some of the grease from the o-ring! ha ha ha.....i think the o-ring grease is maybe to not tear it while stretching it on....good luck......
