After a prop seal started leaking on my 74 Johnson 25 h.p., I completely resealed the lower unit. After holding pressure overnight, I assumed it was O.K. Upon running it in water for a day, it lost about 1 oz. of oil and got some water in the oil. I tore it down, had all the seal fits repaired, replaced the drive shaft bearing and shift rod. After passing pressure testing, it still loses oil and gets water in the oil. The prop shaft has only .005 side play.
Any ideas?