Smallish boat diesels seldom get complete rebuilds in the boat. Pull the top and do the heads, sure, but getting to the crank or reinserting the cam in the boat probably will not happen.
The quality of the rebuild will be vastly improved if you bite the bullet and pull the engine. It will be about $2,000 but it is money well spent. Travel time and truck time which will be charged for an 'in boat" rebuild will easily eat up the cost of pulling and replacing the engine. Not to mention that this gives you a great chance to do other bilge maintenance.
pete
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