Driping grease from lower unit

[Redwing13]

I recently purchased and mid - late 60's Sea King 3 hp after running it and pulling it out of the water,water was dripping from this hole. I figured that this was perfectly normal because I am pretty sure that it is a hole to take in water. However after checking on it several hours later I notice a decent sized puddle of grease/oil with a little water in it and it has a slow yet consistent rate of flow to it. I think that it is the grease from the lower unit. First, what do you think this is and what is causing it, second is it something that I should be worried about and Can I fix it.

I might be able to get some pics up tomorrow to help.

I also have a very basic knowledge of outboards and boat motors in general

[kenJ]

I'm guessing it is a two cycle engine. The exhaust normally exits by going down the shaft and out the prop hub. Many older 2 cycle engine don't burn the fuel/oil completely so you will get some drainage. I would change the lower unit old just to be sure. There should be a lower and upper screw to drain and fill. If it comes out white and foaming then you have a water leak, dark is normal. They are usually filled with 90wt gear oil.