I believe my lower unit is damaged internally. I think I have a broken bearing or something. There is excessive play in and out with the output shaft and you can hear noise when you spin it. I have only owned the boat a year, but have tackled a lot of difficult repair jobs on cars for years and am not afraid to tear into this thing. Can any of you recommend a place where I can get a breakdown on parts (OEM part numbers more specifically) so that when I figure out what is damaged I can search for the parts online?

Alternatively, are there any reputable places to purchase rebuilt lower units? From what I can tell new ones run about $1600 for my boat which is a bit high considering she cost me $5000 to begin with. I don't want to go too far with this thing. I am hoping a good used one can be picked up for a few hundred.

The motor is a 1996 Johnson 130 hp 2 stroke.

Any advise is appreciated.

Where do you live?

Farmers Branch

Get a new lower unit from SEI.http://www.sterndrive.cc/product/Fits-OMC-2-0-R-Late-V-4-5004632.html Call their # to get correct replacement lower unit. I have purchased and installed several of these. Good with 3 year warranty

If you really want to tackle this job, you can probably do it. First buy a factory manual, not clymers. Clymers is ok for some tune up stuff, but is not detailed, so don't waste your money.
You may wind up with more hours doing it yourself, than it is worth, instead of buying a rebuilt one on line.
Then go to: http://shop2.evinrude.com/Index.aspx?s1=b4h7ie7g1rufebuueg0puhf2u3&catalog_id=0&siteid=1
this is the omc parts website. they have parts diagrams and parts list below it.
you will need to have the model #, year, etc.
Once you have the right part numbers for the parts you need, go to marineengine.com ( I like this one best, they have a lot of my money) or iboats.com
at the top right on marineengine.com, enter part number and it will give you OEM parts if available, and after market parts.
it will not tell or show you how to do it though.
If you plan to work on your own motor, the manual is awesome. It will show you how to change your spark plugs and which ones to use for your motor, all the way up to completely rebuild your entire motor with it. But you will need some special tools for some applications. car tools usually won't work.

You can look online for rebuilt lowers. I think I heard about a place in Florida that is very good, cheap, and will ship to you. $750 and up I think? Depends on the size lower.

My experience has been that the parts to repair your lower will cost more than the new SEI lower.

Listen to Gary. Rebuild jobs long on labor and expensive. Mite be worth having checked before you swap out, what does gear oil look like?

If you want a quality job with a good warranty, that you won't have to worry about, buy rebuilt.
If you want to do it yourself to save money, you are not concerned with a warranty, and are pretty darn sure of your mechanical ability, go for it. It won't hurt to tear it down and see if you can find what is wrong.
You will still have a few hundred in it just for parts.
From experience though, you will still wonder if you did it right for several trips. Praying that you did and that nothing falls off. lol
Outboards are nothing like car motors. They are a whole different breed.

I went to replace my water pump last week only to realize my LU was shot bad seals and bearings. I ordered an SEI LU from Texas Outboards and talked to Gary he was extremely helpful and after double checking everything I ordered it online through his site. This was late Monday and I got it yesterday by noon wow that was quick. First thing I was very impressed with the packaging very protective. I installed anodes and greased spline filled case and had it back in less than 30 minutes. The only issue I have at this point is the paint not very durable, however this was something I had read on forums so nothing that was shocking just confirmed. It chips real easy I tapped it with a rubber mallot and it chipped. I will be hitting tbe water tomorrow to start the slow and tedious breakin (not looig forward to that) my understanding is those who have issues alot are due to not breaking in properly. Also this LU has the dual water pickup (holes in cone) this was a bulletin issue out by Mercury so now its taken care of. I will be rebuilding my old LU myself and hanging in the shop for a back up.
I will make posts as the breakin progresses.

Order one from SEI in Florida. I just replaced mine on my 225 Merc. Cost my under $900 with shipping.