First - are you sure you can't just adjust it? If there are any threads left showing below the gland nuts, you can very likely adjust it tighter. That's much more simple than repacking.
If it's already adjusted down to the bottom and needs repacking, what type is it? I think there are two basic types: split type and solid post and cap type. I have the solid post and cap type and you repack it just like a prop shaft gland as follows:
1. Buy repacking material of the correct size. My 1978 53MY has 2 inch shafts and takes 1/2 inch packing, one package per side (3 or 4 wraps). Use "GFO" packing material, which is a new type that's much better than flax. If you use GFO, you'll never have to repack.
2. Get a flexible packing puller (like $16 at BoatUS) if there's a choice get the better one. It's like a flexible corkscrew for getting all the old packing out. Also get three 3-inch and three 4-inch self tapping drywall screws and a vice grip pliers.
3. Get two flat wrenches that fit the gland and locking nut. Originally, Hatteras supplied two of the correct size. They're like 3.5 inch nut wrenches with 8-inch flat steel inch handles. Also get two 12 to 18 inch pipes that fit over the wrench handles to use as breaker bars if the locking nut is stuck.
4. Check your bilge pumps if you're doing this in the water. It's easier if you're hauled, but possible in the water too.
5. Pre-cut the all of the packing material using a pipe or jar that's exactly the same size as the rudder shaft. Make the cuts on a 45 degree angle instead of flat ends, so the material overlaps where it fits together.
6. Unscrew the bottom locking nut on the gland by holding the gland with one wrench and wrenching the locking nut with the other. On mine, it's a standard thread so the locking nut unlocks by rotating it clockwise as viewed from the top of the rudder post, while the gland will take counter clockwise pressure at the same time. It doesn't matter which one turns first. After the locking nut is loose, unscrew it down all the way to the bottom of the post.
7. Screw the top gland all the way up to where it's looser on the shaft and you can reach the packing. Check the new packing material size before removing the old packing material, because that's when the water really satrts coming in.
8. Use the flex packing removing tool to remove all the layers of old packing. It may be very old, very hard and hard to start. If it was packed correctly, it'll be in layers (usually 3 to 5 layers). If it was packed incorrectly, it'll be one long piece of flax wrapped multiple times around the shaft. Screw the tool into each layer and pull hard to start it, then pull it out. If it sticks, screw a drywall screw into the packing material, being careful not to mar the shaft. It's OK to mar the inside of the gland surface, but not the shaft, so be careful of the angle of the screw. Use the vice-grips to pull hard to get the layer out. Make sure you remove all layers of the old packing. You can feel the remover tool scraping against metal at the top of the gland and it won't screw into anything after the last layer is out.
9. Put in the new layers of packing. If necessary, you can screw the gland down on each successive layer to seat them higher and make room for the next layer. Make sure each layer is in correctly and rotate the butt joint on each layer 90 degrees from the previous layer. You need to have enough room after the last layer to get enough threads screwed into the gland to get good pressure on the packing without stripping the threads at the top when you adjust it the first time.
10. Thread the gland down onto the threads and crank it with the wrench just until it stops leaking plus 1/8th turn. Dry it and watch - it should stay dry. Bring the locking nut up to lock it in place. It has to be locked tight enough to not turn on the shaft when you turn the rudders, but not so tight you can't get it unlocked to adjust it. I use hard hand pressure on the 8 inch wrench handles to lock it, but never a breaker bar to tighten.
11. Go turn the rudders from the helm back and forth from stop to stop (it should not make it any harder to turn the wheel). Recheck the gland and retighten. If it stays dry, go run the boat, making lots of turns. Recheck and retighten. Keep checking occasionally for a few weeks. It'll stay completely dry.
12 Forget it for 10 years except for Spring commissioning. If you're hauled for a long time, it may drip for a while after relaunching and then stay dry.
Doug Shuman
1978 53MY