I have been monitoring this thread since it started. I am glad that there finally seems to be light at the end of the tunnel for you, and I am confident that once you have this resolved you'll have a great boat that your family will love.
Reflecting back on how you got to this place, I feel especially bad that you did not choose this path. You had a great boat before Sandy took it from you. That acquisition was not totally without problems either, but because it was a smaller boat your solution was easy - just buy a new outboard motor.
Which leads to an important lesson for others who are just starting out with their first boat. Starting out with a simple boat with minimal systems (such as Jim's prior Catalina 25) is lower risk and likely to get you on the water quicker with less risk. If this "new boat" had been Jim's first one, he almost certainly would have given up by now. But having already sailed on his first boat, and gotten a taste of the joys that lie ahead (and some experience with solving problems), he knows the value of persistence in solving the issues with this second boat.
After reading Jim's issues with this boat, and the other issues that some of you here have described with your own boats, I realize how fortunate I am that I have never missed a day of sailing due to mechanical problems (knock on wood). Much of that is luck, but part of that is simply the fact that my little boat has relatively simple systems that are easy to fix. If my outboard motor were to go kaput, I could easily replace it. Of course, an outboard has other deficiencies if you get into serious swells and chop, but you can't beat its simplicity.
So for those of you who dream of starting out with a 35-40 footer, and looking to save money by getting a project boat for your very first boat, I'd suggest getting started with the smallest boat that can meet your minimal requirements. You'll be much more likely to get on the water with such a boat. Hold off on that "project boat" until your next one (or later).
A lot of good points.
Best boat in the best condition you can find for the type of sailing and use you will do. I would not get hung up on size. Size should be determined by how you intend to sail.
A 25 ft boat with an outboard would not meet our needs. It would have limited our sailing area, prevented us from staying aboard for a few days at a time comfortably. Not only would it not afford us the space, it would also prevent us fom sailing in heavier winds and conditions. An outboard would be woefully underpowered for taking trips as well as in larger waves do to cavitation. Plus I like having diesel as opposed to gas. Simpler too
There is nothing wrong with a boat with a number of projects if it meets the first criteria. It sure beats outgrowing your boat every few years. Taking the boat you want and slowly fixing it up is a great way to achieve that. Once you fix or redesign the systems they become new and updated. It's a waste of money and effort to keep buying and selling boats, and you risk their condition every time you do it.
To me it makes sense to try and get the largest boat you will need ,i n the best condition and improve its systems over time rather than lose money improving a boat you will sell.
At the same time you can use he boat.
To each his own, their is no set formula.