Re: Signs of water in lower unit oil ?
I do two things to test for water in my LU oil. First, I only drain it after I let the motor sit for about a week, as opposed to running it and then draining the oil. This gives the mixture time for water to seperate and move to the bottom. Once I open the drain plug, this should be the first stuff to fall out. Next, I put the remains of my oil into a glass jar and let that sit for a couple of weeks to see if any water seperates and moves to the bottom of the jar.
I agree that since many LU oils come in different colors, looking for milkiness in a motor that has a very small leak, may not show you much. If you have a big leak, I doubt you would miss it any way to you do it.