Well, if it actually is coming out around the screw, somebody might have drilled clear through the housing while attempting to drill out a broken screw. But I doubt that is the real answer. It is very common for water to leak out of the shifter shaft hole, where the shifter goes through the housing. There is an o-ring in there that is shot after almost 60 years of faithful service.
You can replace the o-ring, but you have to remove the powerhead to do so. You also have to remove the powerhead to replace the water pump, so it makes sense to do it all at the same time. In the meantime, the drip won't hurt a thing. Ignore it.
It seems to leak water from the oval part behind the rubber bushing. Mainly behind the lower left flat head screw. Should I be worried? Motor runs great. Pushes me, my wife, and 2 year old through the water pretty will with my 12' v hull. I can touch the head for a few seconds after a long full throttle run so i don't think I'm over heating.
