Water in the gear lube is a serious issue - especially if allowed to remain in the lower unit for a long duration (rust + heat + friction = worn out gears). Yes, you probably need seals. If you're mechanically inclinded you may be able to perform the task yourself, but it's tough - get a manual if so.
I would suggest taking it to a mechanic if you don't match the profile above - get a pressure test on the lower unit, then the mechanic can replace the needed seals when the leg is off. This has it's advantages because you will/should be covered under a warranty if the job isn't done correctly!
Last bit of advice - get the mechanic to replace the water pump while the lower unit is off - should only cost about $20 and the labour has already been done to get at it while replacing the seals...
~Andrew