I had the same issue last year, went round and round, turned out to be a pin hole leak in my gear cooler. I only found it because the gear cooler finally blew out. It looked like unburnt fuel because the gear was running ATF. Might be a place you want to look if the gear cooler is a few years old.
I 2nd this possibility. Tranny coolers often go without warning a 270 most likely has the 63 a gear which uses ATF so it is easy to assume it is fuel, which is doubt as she would be smoking.
Pull your dipstick & look for water. Even if you see no water. It still maybe the cooler. So check the level, as the gear has more pressure to push oil out than to let water in. It is only at idle & rest when the water can make it way in. Lastly if the cooler is over ten years old with no zinc pencil support, it should be replaced with a new unit with a zinc pencil. It is amazing how many boats I have looked at for new owners & the prior owners tap off the oil cooler of the tranny to feed the dripless......OUCH! I have seen it many times, it is a very big NO NO!
If you tap into your tranny cooler by removing the zinc. That cooler is done. On my Yanmar there was a high plug in back of the heat exchanger that was designed for a water feed, so I had no issues. You and many others have tap the tranny cooler which in the long run is a very big NO NO. In addition with a PSS dripless if a low water feed clogs the dripless will self destruct fairly quickly and the water will flow in once the mating plates get glazed & hot. Dripless boxes are great but when they fail they fail for the worse part. A conventional can fail, but it will not give you the worst case senior.capt Larry, where would you get the water from for the dripless? that's where I tapped in for mine, before the water has gone through the cooler, no problems 10 yrs, no excessive wear to dripless p.s. I wonder more about the usefull life of the pss itself, in particular the spring inside the bellows, if that failed the water tight integrity of the seal would come into question, if you push the bellows by hand it doesn't take much to let the water come in. I have had great service from it , but am leaning toward the R.E. Thomas flexible in the future . thanks