Re: 1973 johson 20hp foot leak
Take the tape off that drain hole. It is supposed to drain.
By all means, check the gear oil just to be on the safe side, but that is not gear oil that you see draining out of that hole. It is the oil that you put in the gas. 100% of that oil goes through the powerhead. Some is burned, and the rest goes out the exhaust. It picks up carbon particles in the exhaust tube, which turns it black. In addition, it emuslifies with the cooling water that is also discharged into the exhaust, which makes it thick and foamy.
So, it is normal to get some drainage. However, you were running it in a tank, which collects the scum and makes it look 10 times worse than it really is. In addition, we don't know if the motor was running properly or not. If running poorly, excess unburned gas and oil will be discharged.
Summing up, check the gear oil as a normal maintenance procedure. Then get that thing out of the barrel and on a boat on the lake, where it is designed to run. If it is running properly and adjusted properly, it will run a whole LOT cleaner.
As for the Coast Guard, there is always some zealot ready to cite you for spitting on the sidewalk or coasting through a right turn on red. Form you own opinion on that.