Skunkboat you said it could be the seals under the impeller housing , tell me what you think ,if it was the seal by the prop wouldn't I get oil ozzing out by the prop? Also is it hard to change the two oil seals under the housing ?

like I said before
"Sometimes on some motors the top one can be changed with common tools ...if it is not stuck...The bottom one needs tools and know how."

If u are getting water intrusion on a hose, without submerging the prop shaft or oil port & drain, i d say water pump seal or cracked housing.

When u say oil is discolored, is it milky white or just not clear like when u put it in?

As far as $600 for repair, If that is pulling lower unit, pressure checking, repairing as needed, installing new water pump, and reinstalling lower unit, its not too bad.

buy a complete water pump kit with the upper and lower housing, the lower housing comes with new seals. If you know how to do a water pump on a merc, you can swap out the lower housing using two screw drives or pry bars.

It just lifts out?

Hey guys, I'm going to attempt to replace the seals that are under the base water impeller . I think you have to pry it off and the seals are under there ,is there any advice you can give me? Like do I replace the O Rings and should I coat them with a light coat of grease when putting it back or no grease ? It's a 1988 -150 Mercury outboard and advice would be greatly
Appriciated and if anyone is in my area and wants to help that would be great too

get the new lower water pump housing, it comes with the seals installed. The water pump kit with upper housing comes with all the gaskets and o-rings you need. Just takes two screwdrivers to pry the lower housing out. Put grease on the seals, I use Mercury perfect seal on teh o-rings, nothing needed on the gaskets

I just ordered the complete unit, I will let you know how it turns out. Thanks for all your advice

Yep, Id replace the whole pump housing! Its easy and cheap.

Ok guys, this is a two part question ,first if I have water mixed with the lower unit oil shouldn't the water sepperate from the oil. I have it in a clear container and it's still only a light green color, I'm using pennzoil lower case oil 80 90 weight
The second question is there is a thick heavy duty rubber washer the size of a quarter black coloered does that washer/seal slide on the drive shaft or around the plastic water tube since it could fit both, thanks for any reply so, it's a 1988 150 Mercury black max