Re: help with 70 hp 70's model chrysler lower unit
At the drive shaft, under the water pump, the open end goes down. If it appears to be a solid rubber seal, there still will be a garter spring. It goes down and in either case, the metal case goes up.
Same thing with the shift rod seal: the metal case goes up. It compresses the rubber against the gearcase casting and thus squeezes the shift rod. Do not get it too tight. It should be fairly snug on the rod with no play or slop yet move smoothly without binding.