Water leak/mixing with oil

Normally there is a seal of sorts here (it may be a felt seal or a rubber flap) but I find that if there is a problem here I check firstly the oil level in the gear box and the viscosity of the oil in the box Remove the filler plug (plug in the side of the box ) and drain until oil is level with the bottom of the threads. Best replace oil with a known viscosity oil for you gear box.

There is an oil seal on the gearbox/transaxle input shaft. If this has failed it will leak oil on to the clutch.It might be able to be replaced by just removing the gearbox again to access the seal. Most likely though is, the gearbox will need to be opened up to replace it.

Unless I am mistaken, (Honda guy myself, not fully up to date on mid to late 90's Yamaha) it is a 2 stroke so fuel air mix runs through the crankcase anyway but, excessive amounts are usually caused by a stuck needle valve in the carb. If it is getting into the gearbox oil then you probably have a bad crank shaft seal which requires major surgery.

Good luck hope this helps.

It is normal for the powervalves to leak, but it does depend on where it is leaking from.

The hose on the left side is the power valve chamber vent - it is normal for it to leak thick black oil from this hose.

If the leak is on the right side, and the oil is transmission fluid, then the seal on the actuator shaft needs to be replaced.

Excessive oil from the powervalve hose is a possible sign that the compression is low. Low compression equals lower exhaust temperatures and this can lead to incomplete combustion.

is it coming from transfer case gasket?its mounted to gearbox or breather

almost certainly a bent selector fork

How much was it smoking previously? Too much smoke (oil) is a whole lot better than not enough smoke (oil). If you are mixing the oil and gas then cut back on the mixture. Obviously it is out of balance. Put 1/2 gallon of raw gas in the tank to cut the mix. After a tank or so you should get the balance back.

You need a new shift shaft and probably need a new shift lever due to the bad splines. You can try the JB Weld but I suggest that you go ahead and drill the lever an shaft then put in a cold roll split pin from the hardware store. You have nothing to loose since the shaft and the lever are already toast.

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Your bike is water cooled. Some of that water is leaking into the gear box. The cylinder gasket is the likely leak. I would let the shop take a look at it instead of trying to fix it yourself.

But be sure there is not an external source for the water. Do you wash the bike often? Ride the creek bed often? Leave the bike where the lawn sprinkler gets the bike wet? Leave it out in the rain? Change the oil and keep the bike dry. If the problem comes back then go see the dealer.

water pump / inner,seal needs looking into .

change the seal behind the water pump impeller
the shifter shaft seal will stop leaking
if it continues to mix water and oil you will have to change the head gasket