There are slots on the side of the gasket surface between Merc gimbal housings and sterndrives. I believe it's normal for water to weep from these slots but I curious where the water is coming from?

Not real sure where these slots are, how about a pic?

I've seen them on Alpha's, Bravo's and TRS's for sure, probably others too. If you look on the side near the top of the Sterndrive (left side facing the transom of the TRS for example) where it bolts to the gimbal housing there is a large gasket that fits over the 6 mounting studs of the gimbal and sits between the gimbal to sterndrive coupling. There is a notch cut out that sometimes drips water. I think the notch is on the gimbal surface not the sterndrive, but I'm not 100% positive.