Blown V Drives 1991 Sea Ray 420

From what I see there, either the case has flexed or the pre-load has been wrong for quite a while. I think I see some gear walk in pic 2 and last pic, although without cleaning off the face of the teeth it's just a qualified guess.

Gear walk(or gear splay) is due to torque conditions or as noted above, the flex of some solid component, allowing the gears to separate somewhat under load. Beveled gears are notorious for this if the pre-load(those shims/washers behind the cone bearings) is not set perfectly, or there's been a fault in the lubrication(would like to know if it had a high shear gear lube or 'oil'), or too darn much torque.

Setting pre-load is an engineering task, and many have gotten it wrong before. Also, in this case, it doesn't look like any way to set gear mesh depth. You get what you get from the location of the shafts, and the bevel of the gears, and that's that. It's too late for tribology on the lube, but that might have told some part of the story as well.

I'm not one to say this often, but - start over with new, and get the scrap metal value out of the orig stuff(it's old, used up), don't even try to get 24 year old gear sets(bevel gears are sold in sets, never in onesy).

Good luck,
YMMV

So, you water skiing yet?

Oh Sheet..
Rebuild/repair or replace with the later gear set?
Or no plan yet??