It was a silver color grease, almost looked like antisieze, I ran the motor for 1 hour yesterday in lake, no grease showing, maybe just showed up in the initial engine checkout in the water barrel I did? No more leakage, after the 1 hour runing on the lake. so I guess its alright.
However, during the run for 1 hour, I don't see peeing, engine not hot, exhaust water not over 125F. could it be thermState, hole is cleared.
lake is 78 deg., guess I'll look into impeller and pump.