Suzuki dt140 made grinding noise whIle driving and died

So going across the lake today in my bay boat which has a 1989 sukuki dt140 out board and it started making a grinding noise and died tried to restart but motor would barley turn over friend that was behind me said when it died it shot what look like to be oil out of exaust, get it home still does the same thing so I put it in drive and moved prop and it cranked rite up and ram great new to out board motors can anyone tell me what happened, thanks

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