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I guess some of the newer posters do not have a very good grip on things 
Last time I replaced my impeller it was coated with clean unburnt 2 stroke oil.
The lower seal on powerhead and the check valves on the block were bad so I had oil running down the drive shaft onto the water pump. It was well lubed inside.
Luckaly I was replacing the crank due to main bearings being bad so all new stuff fixed the problem.
OP still has not responded back what oil was leaking out of his water drain hole
Last time I replaced my impeller it was coated with clean unburnt 2 stroke oil.
The lower seal on powerhead and the check valves on the block were bad so I had oil running down the drive shaft onto the water pump. It was well lubed inside.
Luckaly I was replacing the crank due to main bearings being bad so all new stuff fixed the problem.
OP still has not responded back what oil was leaking out of his water drain hole
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