Sorry to hear it, bummer.
My view is that it's a bad idea to get sentimental with boats, I'd take the opportunity to move on.
I'm really sorry to hear about Jim's misfortune.
But I don't think this is about sentimentality, it's about risk management and practicality. There's a certain price/displacement ratio that's always going to have some risk involved. So if he dumps this boat and gets another similar boat, the next one might have similar or worse problems. Only if you alter the ratio by going higher in price and/or lower displacement (i.e., a newer, more reliable but costlier or smaller boat) do you get a little less risk.
It sounds to me like the stuff that failed was destined to fail on a boat this age. It would have been replaced in the next couple of years, but unfortunately has to be done now before he can enjoy the boat. But once it's done, he can be confident that he'll have reliable aux power.
This whole concept of "it'll cost more than the boat is worth" is always a bit misleading. Any low cost boat is going to need greater maintenance and repairs. So you're inviting that when you buy it. The correct comparison is not really between repair cost and current boat value, it's between repair cost (current and anticipated future) and anticipated enjoyment of this particular vessel. In other words, what's this boat worth to YOU? But always keep in mind that dumping this boat and getting another could just be a replay of the same experience, unless you alter your price/displacement ratio in a different way.