Here is the story(sorry because it is long). I bought a boat from a family member that has a 1974 Merc 500 on it. I knew that it was losing oil out of the gearcase when I bought it. I filled it up and took it out for the first ride. When I got back I found it to be full of 100% water. Tore it down and replace all the seals(yes they were all in the right way and I used perfect seal on every thing, and greased the lips of the seals etc). Took it back out and when I got home I still had oil but it had water in it. SOOO.....I tore it down again. I found that the driveshaft was pitted and had groves wore where the seals are against it. So I pulled the shaft and had it machined back to original diameter. Replaced all bearings(since I had it apart), and replaced all the seals again! Stuck it in a trash can and let it run in gear for a moment then shut it down and let it sit for a few moments. Pulled the screw and the oil was clean. No water! Took the boat out tonight and when I got home--guess what--more @%$!&$# water. And it seemed to be under a bit of pressure also as I could hear it escape when I loosened the plug. I don't know what else to do!<br />The prop shaft is spotless as is the shift shaft. I applied perfect seal to all metal edges of the seals and bearing carrier. All gaskets in the water pump are new. It passed the vacuum test and I assume since it was under pressure tonight that it will pass the pressure test also. HELP PLEASE, It is getting to the point that I can't sleep at night!<br /><br />Thanks for any and all suggestions