With the cost of a rebuild a very substantial fraction of the cost of a new engine (installed), and assuming you're looking to keep the boat for the foreseeable future, you might consider how you evaluate the two options from the perspective of ten years from now:
Option 1: Spend X for a new engine and ten years from now you have a ten year old engine with about 1000 hours in service (well maintained, that's almost as good as a new engine).
Option 2: Spend 70-80% of X to rebuild the current engine (assuming you have it done professionally, that's probably a reasonable estimate of what you'd spend) and you then have a 39 year old engine with 1000 hours since a rebuild and 3700 hours of total service.
Shift perspective slightly....assume you're trying to sell the boat ten years from now. How would a prospective buyer look at the relative value of these two options?
Finally, there's always the 'do nothing' option -- if it's working fine, keep loving it and replace it down the road when the engine's performance warrants. At 75-100 hours a year you could probably live with what you've got it for a long time. On the other hand, if you're doing the refit in preparation for a long, multi-year voyage to the far corners of the earth, then focusing only on the rebuild vs replace options probably makes sense.
Last edited by billyruffn; 02-22-2008 at 11:47 AM.