That is a ridiculous excuse. I have never heard of anything like that!
+1 on wahllejim's post. (and +++1 on you for posting these great questions before buying!!!)
The engine in that boat is basically the same as a small pickup motor (although the 3.0L was never used in automotive or pickup markets, it is an industrial motor, but would work fine in a small pickup) Point is, it is a very standard gas motor and it can run at idle all day long - if in good shape will put out just as much oily residue as your car or pickup does when you leave it idling -
meaning none. If it is worn out, all bets are off.
I would test drive the boat again before making a purchase decision and be for sure and certain that no oil is coming out of the outdrive anywhere. Not out of weep holes, not out of exhaust at the prop or the bottom of the gimbal housing (there are two exhaust bypass ports on bottom of housing at the transom so at idle there is little or no back pressure on the exhaust) You should see no oil anywhere. Any excuses by the owner is going to be BS - honest or not.
If there is oil, this means either A) the engine is worn out and passing oil out the exhaust, or B) the hydraulic trim system leaks, or C) (most likely) the outdrive needs seals and or whatever.
An '89 also needs the stringers and transom wood very carefully looked at to make sure it isn't rotten. (newer boats too) Stick your head in there and poke around. Should be solid as a rock. If was me, and there was any doubt about the wood, I would want core samples. Many owners don't want you drilling holes, so often you gotta do your best with eyes and flashlight. If in doubt, pass it by unless you like working on your boat - a lot.
Good luck!
Rick
