I too have a squeal from down below that has been driving me crazy. I have had 3 mechanics come out to find and fix this thing. Two people are required to do the following.
#1. Thrust bearing on the Transmission - Can test this number of ways. Disconnect the shaft from the transmission. This isolates the transmission from the rest of the system. Run the engine in both forward and reverse. If noise is still there it is definitely coming from the engine/transmission. If noise is gone, now the problem can come from a multitude of places.
a. To test the thrust bearing get a piece of 2X4. Find a place next the transmission coupler to be able to pry against the coupler while the engine is turning ( had a stringer next to mine so I was lucky here). With the 2X4 in place, run the engine and put the transmission in forward gear. Hold the 2X4 up against the coupler to put pressure on the thrust bearing while you power up the engine. If you hear a noise it is the thrust bearing. If no noise, next step.
b. Recouple the shaft to the transmission. This technique will only work on an engine that is on soft engine motor mounts. Get a 1" rope about 3 feet long. Loop rope under shaft between packing gland and transmission coupler. Make sure boat is tied down real good at dock. Start engine and put it in forward gear. When you hear the noise/squeal lift up on the rope and move the shaft around. What this test for is the cutlass bearing, shaft rubbing up against the shaft log and packing glad. The noise should change pitch as you move the shaft around. With a pitch change one should be able to determine where it is coming from. If the noise is caused by the shaft rubbing up against the shaft log or packing gland the engine is out of alignment. If the cutlass is bad the noise will shift to very rear of the boat.
C. If noise/squeal hasn't changed pitch things start to get real complicated real fast. Disconnect the shaft again from the transmission. Slide the shaft either forward or back as far as you can. Don scuba gear because you are going to get wet. Now dive the boat and look at the cutlass bearing and where the shaft would be if the prop shaft was in its proper place. What you are looking for here is Calcium build-up. This happens if the boat has been sitting for long period of time between sailing trips. Also look at the cutlass bearing and see if you can see any build up to prevent water flow through the bearing. If there are deposits on the shaft clean it up with 400 emery paper. Check your zinc to make sure it is not too close the cutlass bearing. Water flow could be inhibited if it is. One should have at least 1/2 inch minimum clearance depending on your boat.
If none of the above works good luck because that is where I am at right now with my boat. At a total lose and frustrated.