Where is it leaking from? In your picture, can you use photo shop or paint to put an arrow or something that shows where it is leaking from? What did the guy at Marine Hardware say about it? Just replace it?
If it is leaking from the top of the brass fitting to the shaft going to the drive, greasing should fix the issue - I think. Problem could be bent shaft, grooves in the shaft (doubtful as brass will wear before steel).
If it is leaking from somewhere above or below the hose clamps, you might be able to loosen them, rotate the hose and tighten the clamps again - worth a shot.
If it is leaking from the feed line, just remove it, cut off the end, put a new fitting on and reinstall it - doubt this is your problem, but hard to say.
Also make sure you don't have a restriction past the brass fitting to the shaft toward the prop - water wants to go the least path of resistance. If there is a restriction and the grease is light, it might be able to push past and be the least path of resistance.