Re: 7.5 hp merc leakin lower unit oil.
I have several of these old Mercs so I have come across this problem before. Mercury used steel driveshafts in their outboards until the late 1970's when they changed to a stainless steel shaft. What happens is the the driveshaft becomes pitted from corrosion around the lower unit driveshaft seals. Your 7.5 uses the water pump base to seal around the driveshaft and an o-ring to seal around the pump base-to-housing. Water is probably seeping into your lower gear housing around the driveshaft seal due to the pitting in the shaft. The fix is relatively inexpensive (if you DIY) but requires disassembling of the gear housing to remove the driveshaft. I've taken my driveshaft to a shop that can do welding and machining. The shop uses a lathe to turn down the area that is pitted and then they "spray weld" the area. This is powdery substance heated so that it adheres to the driveshaft to make a permanent repair. They the use a lathe again to turn the repaired area down to the proper factory thickness (in you case prbably 1/2"). I've had a few motors done this way and it costs about $45 (I removed/replaced the shaft myself). You will more then likely need to replace the cover nut that hold the bearing carrier in place ($17), pump base (about $40 or so) and 0-rings ($1-2). The cover nut will need to be drilled/broken in order to remove it. Just be careful you don't drill into the bearing carrier like I did the first time I did this job. Get a Merc shop manual to assist you. Disassembly/reassembly time shouldn't take more than an hour and a half for an experienced tech. But before you do any of this take the lower unit to your shop so they can pressure test the leak to pinpoint its location...just to be sure.
