Water in lower unit?

[SkunkBoat]

Sounds like you have water.
Could come from the top seal under the water pump or from the seal at the prop shaft.

Sometimes on some motors the top one can be changed with common tools ...if it is not stuck...
The bottom one needs tools and knowhow.

I would say drop the lower unit yourself and take it to a shop.
If a shop can't do that right I don't know what to say.
Do it ASAP because everyone is waking up and uncovering their boats....

It won't get better on its own.

An 88 Merc has given you a lot. If it runs good, a couple hundred is the price of a ticket to play.