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I just finished going through a ’61 CD; carb done, new coils, new top end and lower end seals. I thought the L/U was taking in water through the driveshaft or propshaft so I bought the full rebuild kit.
Warning: all propshaft rear shaft carriers have a seal that is a bear of a time to get it. I’ve done dozens of rebuilds over the years and replacing that is the worst part of the job.
Long story short, it is very important to replace the large gasket in the impeller pump housing.I didn’t need the seal kit (at the moment). That’s where the water was getting into my L/U — the previous gasket was handmade of some water or fuel soluable material and had disintegrated, allowing water intrusion.