1974 Merc 500 Lower Unit Problems? Need Help?

[briandjames]

I have a 1971 Chrysler Valiant Boat with a 1974 Merc 500 on it that runs awesome. Last time I had it in the water it was perfect. I went to put the boat in the lake today for the first time this season and the propeller wasn't spinning. It was as if it wasn't completely engaging the gear. Or slipping would be a better word. My friend and I worked with the linkage and could find nothing there. We found that the propeller shaft had a bit of extra play. So we worked and tightened it down. We got the gears to engage firmly foward and reverse and figured that I needed to put a bit more oil in the lower unit. Here is where I need the help. Upon putting the oil in, it started running right back out of the center of the propeller/exhaust. I dropped the drain plug to see if any of the oil had gotten in and to my dismay nothing came out. All of the oil had drained out of the exhasut. I don't get it. I'm by no means a boat engine mechanic, or a lower unit expert. I do know my way around a car engine but this thing is foreign to me. Is this a simple gasket problem or is it something that is way more serious. If it is just a gasket is it something I can fix on my own or do I need to find a outboard mechanic to fix it. I need help here. Thanks.