1956 Evinrude 7.5 oil leaking

[jhotch]

New engine to me, owners said it would not run. Got the top end ignition and carb all set. Fired up on the second pull. At first water came up into the engine housing and then the lower unit got hot and started smoking. There was a fair amount of oil on the shaft and around the propeller and in the water bucket. Ready to replace the impeller, but is this a Lowers unit seal issue as well?

 

[Crosbyman]

drop the oil in the LU.. if any water is in there you will see it mixed with oil like mush (cream colored ) pull the prop look for mono fish line on the shaft ...shaft seal may be damaged requiring a rebuil/reseal of the gearcase

oil in the bucket could be normal sludge (unburnt fuel/oil and carbon)

 

[F_R]

Of course there is oil in the bucket. It is the oil that you put in the gas. It doesn't just disappear.

The water under the hood is from a rotted out core ("freeze") plug in the cylinder head. There are three of them. The bottom one is notorious for rotting out.