Drive lube reservoir leaking?
 

7.4 and b1....I've been getting an awful oil burning smell so I traced the source, I seem to be leaking drive lube from the reservoir cap and its dripping down on to the exhaust manifold then onto the engine block finally pooling in the bilge area. When the engine is cold the drive lube is at or just below the full line on the reservoir. After the boat has been driven for a little bit the oil level rises the spills from the reservoir cap. When its hot the drive lube looks very frothy like there is a bunch of air mixed in. Although it's been leaking I have not yet had to add any lube to it (stays at the full line). I' am new to this boat but I do know this cant be normal just looking for some input as to why this is happening and what I can do to fix it!!
Thanks.

Might try a new cap sounds like it's not venting

We only fill the reservoir about 50/60 full to allow for expansion. Try just leaving the drive oil level where it is and see what if this fixes the issue.

don't want to scare you but sometimes when the drive oil rises substantially it's because the oil is overheating because something is going bad in the drive.

Hopefully the bottle is just overfilled.

X2

Now you got me worried... lol! If its doing this now whats going to happen when I put the procharger to it (crunch)... The lube in the reservoir does not smell burnt if thats any help and its not leaking out of the vent on top of the cap, but out of the threds of the actual reservoir. Does the diaphram on the inside of the cap have a pressure rating or does it just slowly let air out? Livorsi sells these fancy little caps would one of those do me any good? Would it even fit?
Guys thanks for all the help!

could have water in fluid maybe?

All good leads...pull an drive drain plug and see what kind of wear shows up on the magnets. Very light fuzz is ok...chunks are not. If you aren't sure, post a picture.

Thanks BenPerfected, I am guessing that the magnet is attached to the innerside of the drain plug? Located behind the prop correct?

Correct