MS, concerning the 1/4" packing I called another diesel shop to get a second opinion and he didn't think that the 1/4" inch made that much of a difference and wouldn't necessarily change it as the first thing to do.
When you go looking for a new mechanic (and, IMO, you do need a new mechanic), you don't want that one, either.
There is a reason that a particular size of packing material is specified. There is a reason they make it in size increments of 1/16".
Also upon loosening the packing nut wouldn't it be more likely that water flow would be first at the back end of the packing?
No. If it's coming out there it indicates not that water is seeping between the packing material and the shaft (which is where it
needs to be for lubrication and cooling), but between the two parts of the packing gland--which is just... leakage.
The stuffing box is really a brain-dead simple thing. This is not rocket surgery. Maine Sail is not Making Things Up, and he definitely knows whereof he speaks. Either get the proper size packing material (I recommend Gore GFO or GTU) and replace it yourself, or hire a
competent marine mechanic to do it. It can be done in the water.
Either way: Get it right. Replacing a prop shaft is expen$ive. I should know: We just did it this spring. (Not, btw, because the shaft was scored from the stuffing box packing material.)
Jim