Oil NOT used on early K Models.
Fill gear case with a grease recommended for outboard lower unit.
General purpose grease does not have rust inhibitor
Water will enter gear case and mix with grease
Check from time to time and flush and fill before storage.
Farm product called corn head grease is said to be suitable
Later Mercurys had a more modern gear case designed for oil.
Oil or Grease place a pie pan underneath to catch leakage when stored on rack
Napa sells a motor assembly grease called Lubriplate 105. It is supposed to be very similar to what the factory put in them originaly and comes in a tube. I use it in my KD3 lower end.
That and the corn head grease are the two most accepted lubricants in the K model lowers