your bellows are done... even if you didn't have a hole they are YEARS past replacement time....
Personally I would get serious w maintenance... A fellow with basic tools, and a mechanical aptitude could pull the drive, engine and transom assembly, check the transom out, replace the rubber seal on the transom assembly and put it all back together with new bellows, shift cable, shifter seal, gimbal bearing, impeller, and gear oil in a weekend for a few hundred dollars.
Example, if you have a way to lift it, one experienced guy can pull the engine in 15 minutes and an amateur can do it in an hour.
A little crying today followed by a rough weekend can make for much safer and more enjoyable boating for years to come.
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