I bought a 30 footer for 500.00.....
Your post is definitelt a case of I got good news and I got bad news. Congratulations, the good news is that the boat sounds like the boat in better shape than you hoped and I ahd feared. The bad news is that it is a Santana 30 which has very little resale value compared to a 30/30 and far less since it has wheel steering. The other bad news is that your original post suggested that you wanted to race this boat and considered it an equal to a J-30. The Santana 30 is not a competitive boat (especially with a wheel), and it is the 30/30 that is comparable to the J-30 in performance. You should probably try to set a budget around $8 to $10K for materials and outsourced labor and figure you will run over that budget by as much as 100% when you are all done. (Any more than that you can probably buy a better boat in near perfect shape).
A couple quick points here:
Engine: As soon as you can, drain the oil from the engine. Drain the fuel tank and remove the fuel filter so that dirty fuel cannot get into the engine. Put fresh oil in the engine, open the pressure relief valves, and turn the engine over by hand. Do that several times. With any luck, minimal water got to the upper end of the engine but that is probably not the case. In all likelihood you will need a full top and bottom rebuild. The parts for these engines are quite expensive and unless you are a good mechanic and can do all of your own work, it might make sense to just buy a rebuilt Volvo, Volvo short block, or Yanmar (I personally like Yanmars better).
Keel: There are several good sources but Mars Metals is generally considered the most reasonable and highest quality. You might want to see about getting them to produce a more efficient modern keel since you need to replace the keel anyway.
I would not support the boat on concrete blocks. Concrete blocks are not designed for point loads and have a habit of giving way suddenly.