In addition to pressure testing you also have to vacuum test it. Pressure test it to 15psi and it should hold for days. Move any of the shafts and listen for the leak. There's any number of places where the water could be getting in - through the seal in the baseplate under the water pump, prop shaft (especially if there's fishing line caught around the shaft), shift rod seal, upper vertical shaft seal, and either of the two oil plug gaskets.