Repair or Replace? Always a difficult decision. And one for which generalities are of no help. The small Volvo diesels have a good reputation but probabilities mean nothing about the particular case at hand. Best option is to get a good mechanic, other than the one that would do the work, to give you an opinion. This will cost, but is probably worth paying.
Before making a decision to go to higher power, make sure you are using the current one to best advantage. Can you use the current engine (you did not say what is wrong with it)?
As far as I can determine the MD6A is rated at 2400 rpm. This determines a couple of things.
1) At wide open throttle (WOT) you should just hit 2400 rpm. If you cannot or if it gets there before WOT you need to worry about the prop first.
Now if you have the right prop.
2) Your normal cruise rpm should be about 1950 rpm. Use an optical tach to check your boat tach before believing it too closely. If you cruise at less than this, you will pay the price in more maintanence and shorter lifetimes.
If 1950 rpm brings the boat close to hull speed and if you can increase rpm (up to a max of 2400) in order to keep the speed up when motoring into head winds and seas, then you have the right size engine and prop for the boat.