Sounds a lot like a project boat I bought this summer. It was a cosmetic mess, but the mess was hiding a solid structure. The boat was practically free and I've had a blast over the last 3 months tinkering, cleaning and upgrading. I say if it's structurally sound, have at it!
If you're intersted, here's a website about my project: http://www.sailblogs.com/member/dreambegins/