From the description of seeing bubbles at the case joint, it should just need a reseal job. While you have the case open, also be sure to change the upper and lower crankshaft seals. I don’t have a parts list for that year model but I believe it uses a carbon seal with an internal O-ring for the crankcase seals, similar to later model QD motors. Just need to replace those O-rings.
Bob
1937 Champion D2C Deluxe Lite Twin
1954 Johnson CD-11
1957 Evinrude Fastwin 18
1958 Johnson QD-19
1958 Johnson FD-12
1959 Johnson QD-20
“Every 20 minute job is only a broken bolt away from a 3-day project.”
"Every time you remove a broken or seized bolt an angel gets his wings."