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I have a 1988 165hp Mercruiser I/O with an Alpha 1 Outdrive. When splitting the lower unit from the upper unit (to change the impeller), I notice that there was no gasket between the two its just metal bolted to metal, is there supposed to be?
There is no larger gasket between the upper and lower. BUT there is a very important O ring for the oil vein that when the drive is assembled allows oil to flow from the upper to lower and vice versa. This O ring is on the edge of the metal on one of the sides of the pump, find this O ring and make sure it stays there when you put the drive back together, don't lose it or you will get water in your oil.
