[JohnB]

rsegreto,
I have a GRP meter to measure moisture. If you drilled holes and water came out, save your money on the meter. It will tell you that the whole thing is wet. When I was boat shopping, 80% of the boats more than 5 years old that had cutout style transoms, and outboards were signifigantly wet according to the meter, regardless of manufacture or visible inspection. I talked to Carl Mosely this week about my boat (great guy, thanks for the info Carl), and he said that water from the atmospheric preasure changes will naturally penetrate any transom. If you have water in the bilge, which has no sealing gelcoat, it will migrate into the wood. It is a fact of life. I don't know if this is the cause, but I agree by observation, as to what I saw. I went thru a boat yard in Tarpon Springs and put my moisture meter on about 60 boats, and the majority of them had wet transoms (these were high end boats under cover, and dry stored). If you have water running out, you need to determine whether or not it is structurally compromised, or just wet. If it is structurally compromised, it needs a new transom. If it is just wet, you might be able to dry it out, than us a West Epoxy treatment on it. Mine was wet but structurally sound (as best I could tell). I dried it out to 15% or less moisture detection, than treated it with West Epoxy, and sealed it back up 3 months ago. I check it every month with the meter, and it has stayed a consistant 10 - 15% on the meter. As far as flex on the motor goes, I have a 250 Merc which weighs about 470 pounds. If you stand on the back of it, there is very little flex in the transom, but if you start bouncing it back and forth, you can see some flex. I think that even a good transom with almost 500 pounds bouncing back and forth will get some flex to it. My long term strategy is to put a bracket on that will distribute the load evenly across the back of the boat.
Keep us up to date on what you find.