Welcome to CHR!

Like a lot of first time posts we get here you’ve got a nasty situation – sorry to hear about your problem but hopefully we can help you get this diagnosed and fixed to get that boat on the water this summer.

It would appear that pressure has built inside the engine to the point that it is literally blowing oil out where ever it can. Fortunately you didn’t get a fire out of this ordeal. Was there any indication of where the oil was coming out of the engine?

If this is a stock Mercruiser, your oil pressure alarm is probably on the same circuit as the engine temperature and transmission oil temperature. The oil pressure is a totally different sender and circuit. What was your oil pressure when you got the alarm?

What was your engine temperature when you got the alarm?

A compression check will tell us quickly if there is a bad cylinder (rings?) that is allowing that piston to be blowing the pressure generated on the compression stoke back into the crankcase. That would definitely be a problem and certainly account for your oil bath.

Did the PCV valve come out of the valve cover in this process? Does your PCV have a hose going into the air cleaner or the base of the carburetor?

Also, when you say the freeze plugs were cracked, did you contact the vendor you bought the engine from and ask why? I would see that as a red flag.

Keep the information coming and we’ll work this through with you.

Regards.
Glenn