Is there supposed to be water in the u-joint bellows on a stern drive

No

Thanks for the reply this is probably why my gimbal baring went bad then.

Nope only grease that normally slung by the gimball bearing. If you find water in the bellows, the likely culprit is the driveshaft bellows itself. Sometimes minor hole can let alot of water in. It will eventually destroy the gimball bearing especially in salt water and can leak into the drive via the DS oil seal. The seal is meant to keep oil in the drive not water out.

It could sink your boat to if left in the water!!

It will sink your boat if left in the water with no autobilge.

Change the bellows and the bearing.

Just a tidbit of info that may save you some time. If you change the bellows and the gimble bearing yourself, be sure to put an alignment tool through the bearing to align it. You need to align the new bearing to the coupler or you will never get the drive on. Hope this helps, Eddie.

P.S.- Change all of the bellows, not just the one on the ujoint. If that one is leaking, they are all probably on their way. You may or may not have one on the exhaust, but you should change the boot on the shift cable.