Just noticed a tiny amount of oil coming out of the water pickup bottom holes. Lower unit oil has a small amount of milky color. Other than seals, any other ideas or possibilities?

No Sir. Have it pressure tested.

I have a pressure gauge but no fittings to match the plug holes. I used a nozzle with rubber tip and top plug installed and ran 80 psi into the casing and did not hear any leakage. It held pressure for as long as I held nozzle in there tight but I had no gauge to tell if there was any leak down.
I recently installed a complete new water pump and seals on the shaft. Haven't hit anything in the water.
Not sure how any oil or lube could even get into the water pickup holes/passage. This looked too thin to be gear lube and that scares the bejesus out of me. 2 stroke engine should not have any kind of oil leak coming down from the head.

So, Walmart didn't have any Quicksilver gear oil so I had to get Valvoline Marine 80-90w synthetic.
My guess is that the difference is not much more than donuts with round holes vs square holes.
At the very least it will make good flushing media.

Too much pressure. I am surprised you didn`t blow out seals. I check lowers with 15psi. Buy you a pressure tester:

Shift shaft seal is designed to bleed off around 14 to 15 psi

Maybe my lower hot and leaked some but why would anything come out the water pickup holes? I'm pretty sure the silicone dam I did was good and I cleaned all the old silicone off before using the High temp RV stuff if that's where it would have come from.
There was not enough oil leakage to even drip off the bottom of the skeg.
Anyway I changed the lower unit oil, cleaned everything real good and sitting over night there was no more leakage.
Thanks all