Gear oil?

[BRPforlife]

Hey guys,
I'm somewhat clueless when it comes to boats, so hopefully someone can help me out.

I have an old (probably early 90's) Merc 40 that has been sitting in my shop for the winter. I noticed a puddle of black oil underneith and I can't for the life of me figure out where it's coming from.

I took off the propeller housing and removed the drive shaft. It's filled with what looks like diluted (it was pretty thin)white lithium grease. My question is what parts of the outboard need to be topped up with oil every season (or an oil change)?
There were two screws on the housing, one of which looks like a drain and the other I'm not sure. Any help would be great.

[IndianRvrShiver]

With your description of the condition of the lube, it sounds like you may have a leaky seal that is allowing water to get in & mix with the oil. It gets all whipped up like a milk shake! Check your seals very carefully & replace where needed.
There are 2 plugs, as you've noticed, in the gear case. When you drain the old oil, remove the bottom one first then the top one (allows air into the case). When filling the case, you actually must use the bottom hole.....use a pump or a squeeze bottle with a tapered nipple. Keep filling from the bottom hole, until the oil reaches the top hole. Insert the top plug (this will create an air-lock or vacuum) then quickly install the bottom plug. Although this method can be very messy, it will ensure there are no air bubbles inside the gear case that could happen if you were to fill from the top hole.
Drain & fill should be done at the beginning of every season, because it seems there is always a way for some water to mix with the lube. Also use a top grade OEM lube like Merc, OMC, etc.
Good luck & happy fishing!!

[BRPforlife]

I couldn't ask for a better answer. Thanks IRS