This is not a direct answer to your question, and I am not being critical but need to ask when I see posts such as these, a Catalina 36 is not what I would consider a "special" boat, there must be dozens for sale in the market, why would you just not buy one that had not been previously sunk?
With a 5 foot x 5 foot hole and sinking, I think your best answer came in post #2. A quick search on yachtworld turned up 12 1985 Catalina 36's price 40k - 69k. The one you are looking at would have to be one hell of deal for me to give it a second look.
hunter Legend 37 Semper Paratus
Formerly - Tartan 34C Yawl