Water in lower unit?

[cfelton]

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

[steplift20]

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

[steplift20]

Forget the question about the rubber washer, I know where that goes but the oil and water mix I'm still not sure