in the pics are both lower units in full fwd gear?
Remove the brass shoe, turn the shaft fully clockwise and then set it back on. if not at 12:00 or if past 12"00 then the "C" selector may be damaged or the shift spool is badly worn showing the shift arm going past the 12:00 position
serial number shows the single point drain and a plug on the therm housing to vent.
Its a bad system .by design. Sounds great until the block drains get clogged with rust ,sand and scale Personally I would remove this system and go back to the old way to drain a motor by removing the block...
guessing you damaged the casing by twisting it somehow, need to have it as straight as possible or have a helper turn it in the opposite direction at the same time and you screw it in
seen that before, assuming your in the water in this video. The base gasket is leaking and your sucking in hot exaust at higher rpm`s because the water pump in the lower unit is above the water and the cavity is empty except for the hot exaust gasses
the easiest way is to place the lower in a stand using some 2 x 4`s and installing the upper on it , them remount the whole drive.
Theres way too much risk trying to force it to fit
oil from the drain holes does not mean the upper seals were the problem and most likely is the seal in/under the water pump base.Alpha 1 or the alpha 1 GEN II are both easily replaced. The play in the upper shaft is normal with the top cap off,
There are 2 seals in the upper , input shaft is...