VD72C with reducing gear leaking at the shaft

[phorvati]

I have a VD72C with 1.95:1 reducing gear. It sits on an angle. i have not checked how steep the angle is but the setup was there since the early 90s when Lehman 90Hp got installed by Ford northeast two owners ago. Originally, when i first launched and tried putting the boat in gear last year it had a hard time catching/going in gear. So i added just enough transmission fluid to help it get into gear smoothly. So last summer i put about 20 hours on it and had no noticeable issues. This year i decided to add the fluid per the dipstick mark. My dipstick has a typical factory placed notch, and a new manually scratched mark. I am assuming at install they adjusted the mark because of the down angle. Everything seemed fine accept after the first extended engine run, 5-6 hours, I noticed red fluid spraying circular pattern right at the shaft coupling. i would place oilsorb pads to catch it as best as possible and they got pretty soaked after the next trip(about 8 hours of runtime). But since then it stopped. Just this passed week i had about 14 hours of engine run time and my white oilsorb pads are no longer getting transmission fluid on them. I checked the dipstick and its still showing fluid. Less than the level when i first added the fluid. But i did this with engine cold.

I want to say i might have over-filled it, but with transmission on an angle is there a good way to check what the proper level is?
Unfortunately i have no way to disconnect the prop shaft as everything is pretty tight. I would have to haul out, disconnect the PSS collar, and pull the prop shaft from outside in order to get at the transmission backing nut.

I am worried that the nut is loose or needs replacement. How would i know if pump is no longer picking up oil from the oil bath? And am I safe distance from that point if oil is showing up on a dipstick and i keep it at a level which is lower than dipstick mark so it doesnt leak