Malcle,
I don't think I'd downsize my engine in a Crealock 34. We have a Crealock 31 with the 3GM30F (predecessor to the 3YM30F), and I wouldn't want this engine to have to push any more boat. I would go with the 3JH4E for your boat, which I believe is the follow-on engine to your 3HM35F (not positive about that, though). Or consider some of the offerings from BetaMarine (marinized Kubato) such as the BV1305 (35 hp, 4 cylinder). I know of at least one Crealock 37 owner who went with a Beta replacement and is very pleased.
But the best advice you could get would be from other 34 owners. The original 34s had Westerbekes (I think, maybe Universal or Perkins) and many of these have been swapped out. The better forum to contact them is on Sailnet's Pacific Seacraft e-mail list serve, where there are MANY 34 owners:
http://list.sailnet.net/read/?forum=pacificseacraft
Good Luck!