The area in green is where the exhaust bellows is, and when you have the drive up as you do in the picture the bellows seperates. You might have a split in the water hose, it's 3/4 and is where you indicate in yellow. Check the hose by raising it all the way up and look at it. If it's ok then your probaly just spraying water back to that point. Always run it in the down position on the trailer as it will bind the u joints if it's up. When running in the down position on the trailer you will see the water come out of the prop. Hope this helps!