Thanks for the note. That's what the Merc ProStaff Service guys told me too. They said they wouldn't really know until they opened it up though. If it's just the pinion gear, and nothing is cracked, is it a fairly inexpensive fix? On the outside, everything looks normal, no cracks or damage.
I'm thinking of getting it fixed and keeping it as a spare, or possibly selling it to someone looking for a good lower unit....but I don't want to spend $1500 and sell it for $1400. Thanks again!!