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I have a 1965 Formula JR with an Eaton 165 Interceptor Outdrive mated to a 260 Ford.
I think the Eaton is F'd because oil drips out mixed with water. Its old and probably tired.

First off, does anyone know anything about Eaton's?
Second, how difficult would it be to swap out a newer outdrive?
 

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Eaton are good drives for small HP. Parts will cost more then your first born. I think Volvo Pentas will swap out.
 
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