Yes the prop shaft seal needs to be replaced.Do this sooner than later as water will get into the lower g/box.Sometimes they wear out or fishing line is a bad culprit.Its not a big job but it really needs to be done.The oil will also need replacing.Hope this helps
Wait a minute It might just be exhaust residue see if water in gear case if it is real black it is probably exhaust soot from the motor
There is a good detailed instruction on removing the propeller shaft seal and bearings in the SELOC manual. Worth the price. Tells you how to deal with the fact the bearing carrier won't budge. Worked for my 135 hp Johnson.
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