What is actually inside a lower unit
Under the anti-ventilation plate sits a gearcase containing a vertical driveshaft, a pinion gear, forward and reverse gears, a clutch dog, the propeller shaft, and a set of bearings and seals holding all of it in an oil bath. The whole assembly runs submerged whenever the boat is in the water. Everything keeping the lake out of it is a seal or an O-ring, and every one of those is a wear item. The oil inside is not only lubricant; it is the evidence of what is happening in there.
The gearcase is also where the engine water pump lives on most outboards, which is why a pump job and a lower unit job often happen at the same time; cooling is covered in full on its own page. Drain and fill plugs sit low and high on the housing, and the little gasket washers under those screws are a common and overlooked leak path. A gearcase weeping oil at the drain screw is losing its protection slowly and quietly.
Reading the gear lube
Milky, coffee-coloured gear lube means water has got in. Water emulsifies with the oil, destroys its film strength, and over a New Hampshire winter it freezes and expands inside the housing, which can crack a case that would otherwise have been a straightforward reseal. Milky oil found in autumn is an urgent job, not a spring job. A gearcase full of emulsified oil left to freeze in an unheated shed is a far more expensive repair than a set of seals.
Metallic content carries a different message. A fine grey haze of particles clinging to the magnetic drain plug is normal wear. Bright flakes, chips, or a plug wearing a beard of swarf means gear or bearing material is coming off somewhere inside. Burnt-smelling oil that has gone dark and thin has been run hot or run low. Pulling the drain plug and looking hard at what comes out, once a season and after any hard strike, is the cheapest diagnostic on the boat.
Seals, and why they fail
Seals fail from age, from heat, and from what wraps itself around the shaft. The prop shaft seal is the usual victim: fishing line wound tight behind the propeller cuts straight through the seal lip and then into the shaft itself. That is why the propeller should come off periodically rather than simply being looked at from the side. The driveshaft seal at the top and the shift shaft seal both leak as well, and both let water find its way down into the oil.
A pressure and vacuum test tells you whether the housing is sealed before anything is dismantled, and again after it is rebuilt. The case is pressurised, held and watched, then the vacuum side is checked, because some seals hold in one direction and not the other. Skipping that test is how a gearcase goes back together with fresh oil and exactly the same leak it came in with. Any reseal that is not pressure tested is a guess rather than a repair.
Gears, bearings and shifting faults
Gears and bearings tell you what is wrong by the noise they make. A whine that changes with engine speed in gear and disappears in neutral points at the gearset. A rumble or growl present whenever the shaft turns points at a bearing. Chipped gear teeth produce a regular clack at shaft speed. None of it improves on its own, and continuing to run a gearcase that is shedding material grinds that debris through every remaining bearing in the housing.
Shifting problems are often not the gearcase at all. A clutch dog with rounded edges bangs into gear and jumps back out under load, and that genuinely needs the unit opened; the classic symptom is a boat that pops out of reverse. But hard shifting, a stuck neutral or a lever that will not engage is just as often cable adjustment, a seized shift linkage, or a worn shift shaft bushing. Working out which it is before the unit comes off saves the job.
What a reseal involves, and why it is shop work
A reseal means the lower unit comes off the boat. Shift linkage disconnected, mounting bolts out, the unit dropped clear, the housing split, bearings and gears inspected, every seal and O-ring replaced, shims checked so the gear mesh is correct on reassembly, and the whole thing pressure tested before it goes back on with fresh oil. Gear mesh is set by shim thickness, and getting that wrong will destroy a perfectly good gearset within a single season.
This is bench work, not a dockside job. It needs the boat supported, the unit lifted clear, a clean bench and a press. Winnipesaukee has granite ledge and boulders, and the water around the islands shoals fast; a skeg or propeller strike sends a shock load straight into the gearcase and its bearings. After any hard contact the honest check is the oil, the shaft checked for runout, and a pressure test, not simply whether the boat still drove home.