Lower unit/gearcase= the same thing!?! In 42 years of fishin', including sellin' boats for 21 years, I've never seen parts from a broken top end hurt a lower end. Maybe in a top fuel HEMI. I really suggest that you seek another opinion...
I hate seein' folks get ripped off. I've built motors, been around more failures than most, and blown a few up myself. And I'm as much of a fan of Merc as fishinwrench is of his antiquated OMC's (right, buddy?). There are very few flaws with modern engines as far as designs are concerned- probably 80% of the toasted engines that I've seen come from operator issues. Fact.
Sorry Glen, my first posts, but I couldn't help myself.
DChance- make the relatively short trip to the LOZ and see fishinwrench, and for fun he can also refer you just up the road to arguably the BEST Mercury mechanic in the state for a THIRD opinion. This will give you some ideas to choose from. Good luck.