I got 2 probs.

First, there's oil leaking from I think the shifter axle...there's a little rubber gasket. Could he be guilty of allowing clandestine oil out of the engine? BTW, I changed oil, and it's gray (more light gray than anthracit -dark- gray). Does that mean water came in? BTW, how do I take the little seal off?
Also, what's the use of that white plastic cap under the front sprocket?

Second, the place where the stator sits was "full" of water and sand/dirt. The seal seemed to be OK. Is it maybe the plastic that bent and doesn't seal anymore? Can water get in the engine from there?

Anybody had such probs?
Please help me!

 

to get out the shift shaft seal screw a drywall screw through it a few turns and pull it out with vise grips, a good tip for a banshee is to drill a 1/8" hole in the bottom of the magneto cover to let water out and seal the rubber gasket all around with clear silicone. it won't get into the motor through there, but it will rust up the stator, I used to take off my cover every month or so to blow it all out. the WATER COMES IN mainy through the stator wiring hole, smear some clear silicone around the rubber grommet from the inside and outside.