Oil in pump out water when in gear

[tsprouster]

Hi,My Columbia 27 has a very dirty prop and bottom.The Yanmar deisal is ok in neutral and pumps out clear water but when i put it into gear either R or F it starts pumping out oil and has a lack of propulsion.
I guess i have too slip it and get it cleaned but would that be the logical senario for oil in the water when the engine is in gear ??

[Wotname]

Are you sure it is oil; more likely to be fuel (diesel).

Engine won't rev out at WOT and exhaust will contain unburnt fuel and you will probably have black smoke.
Dirty prop will be the cause of lack of propulsion and the overloaded engine.