Hope you wiil be fine with the motor!! I have been there done that!!
I had the 6 (chevy 250) and the head rotted a hole in it and water was every where! I was able to save the motor!
But after that I found there was a lot of rot going on and it spread like crazy!! I ended up changing riser, manafold, oil pan Ect Ect Ect...... Only for another rot hole to allow water in the motor? Thats when I had to repower!
But mine was raw water coled and the salt going thur that motor wasn't good!!
Any way if you working on the shaft going to the outdrive you are going the wrong way!!
Unbolt the outdrive and pull it of the shaft comes with it!! No need to pull the motor!
the shaft goes thur the back and into the engin coupler.
There is a berin in the hole after you pull the outdrive called the Gimble berring.
just a sample pic of were the bering is on the gimble where the shaft runs thur.
Yours may be differen a bit as this is just a exsample!!
Again exsample of the steering fork
