On a new PD lower unit install: as per PD, directions say drill a 3/4 hole 3 3/4' up from the bottom of the l/u housing. Measurement to the middle of the grease zerk is 4". I don't think there is a 1/4 of slack between the bottom of the housing and the top of the new l/u. Any thoughts??

What is our question? Drill it exactly how they say to do it or the hole will not line up with the zert inside. The resason your drilling the hole in the first place. It can be adjusted left or right some because of the swivel of the motor but the height needs to be what they state.

Yea, I get all that. I am trying to understand why the measurement is 4" and the instruction is to drill at 3 3/4. Where does the other 1/4" go ? That is the question!

There is a teflon sleave that slides in to the transome housing. Then your LU will slide into that. Maybe that is where you are losing your 1/4"????

3 3/4 measurement worked out fine. The lower unit has a bit of a space between it and the l/u housing.

Just a side note, I used a 21/32 bit for a 3/4 10 tap. It is a bolt thread and not a pipe thread. I could not locate the needed 59/64 bit, (in my area and in a timely manor) that would have allowed a 3/4 14 npt. I would have preferred the npt.