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First of all you need to find out if that is where your problem really is. Find the little weep hole on the lower starboard side of the coolant circulating pump on the front of the engine. Make sure that the hole is open (clean it out to make sure). Start the engine and see if it is leaking from the weep hole. If it is not, it is unlikely that the "water" in the engine is coming from a bad cam seal. Couple of other things: Is it water or antifreeze in the oil? You should be able to smell antifreeze in the oil. Is the coolant level dropping in the reservoir? If not it is probably a seawater leak. If it is seawater, the only place I can think of as a source is from somewhere around the exhaust manifold. Maybe some other folks with more knowledge than I can take a guess. Finally If you need new cam seals, it is a PITA, but can be done by a do it yourselfer check out: http://www.sterndrives.com/470information/470coolantleakrepair.html
Good luck
I rebuilt one of these couple yrs ago and the cam nose where the seals ride was so pitted I installed a speedi-sleave on it. However it has to be done after timing chain sprocket is installed and before the timing cover installed...but it CAN be done. 'nutcase
