If your Merc has stainless shafts,...Driveshaft, propshaft, & shift shaft,...The most common failure point is the shift shaft bushing's seal and the condition of the shift shaft at the seal point. This is commonly caused by leaving the control box in the Neutral position.
With oil in - or - drained, you should be able to hold 15 psi while rotating the shift shaft from F-N-R and back, flexing the shift shaft a bit as you do this.
Allow the 15 psi remain for 15 minutes minimum.
Identify pressure leaks with aerosol sprayed lite oil - like fogging oil, penetrating oil, etc.
The next most common failure is at the seals under the water pump housing, or the prop shaft seals if the beast has run over fish line.
Be sure your drain plug & vent plug have good fiber washers, and snug them up good before pressure - or - vacuum testing.
Here is a short explanation I shared with another Mercaholic regarding these repairs:
"So my question is: can I replace the shift shaft seal with out tearing the whole lower unit apart (once it is dropped off the mid section) and access it from the outside?"
Yes.
You will need to either fabricate or have a unique tool to remove the shift shaft bushing.
Be sure and rest a large socket onto the top of the bushing, and smack it real hard with a 3 pound+ hammer. Then it will surrender & unscrew.
Then be sure and secure the lower unit in your vise with the driveshaft perfectly vertical.
Then be sure to shift the shift shaft into Forward gear before removing the shift shaft. Rotate the shift shaft back-n-forth in the free movement area of Forward, so that the shift cam won't get pushed out of position while the shift shaft is removed.
You will want to remove the shift shaft to inspect it for pitting at the point the seal makes contact.
"Replace the drive shaft seal under the water pump while I am in the neighborhood?"
Yes.
Reassemble the shift shaft & bushing.
Remove the water pump housing & impeller.
Then remove the "Flush" screw plug, and remove the bottom section of the water pump housing.
Then you will be able to see the condition of the (2) different seal areas on the driveshaft.
If this area is stainless steel, you might just need to replace the (2) related seals & o-ring.
If needed,...Clean the areas the best you can before installing speedi-sleeves.
To clean the areas on a rusty, pitted driveshaft:
I tuck rags & tape in to cover the bearing,
Then put a nut onto the prop shaft,
Then put the relative socket onto a husky drill motor,
Then shift into Reverse gear and hold the shift shaft in Revers gear (or it will pop out of gear),
Then begin spinning to prop shaft, which turns the driveshaft.
Hold sand paper firmly against the rusted - pitted areas until it looks as good as it is going to get.
Then using this same process, sand the entire length of the driveshaft to remove high spots that might restrict movement of the speedi-sleeves.
Identify the specific area that you will want to center the lower "speedi-sleeve", and fill the pitted surface with a thin coating of J-B Weld or your favorite epoxy.
Repeat this process for the upper seal area & related speedi-sleeve.
doc