---had the saildrive taken out and an outboard motor installed in its place.
, and it struck me:
Did you actually mean that the outboard is placed on the old diesel engine bedding (i.e. inside the boat)?
If so (heaven forbid), I would be concerned about petrol fumes and the corresponding fire hazard.
Otherwise, an outboard engine is fine, as the other contributors say.
I use a Yamaha four stroke 9,9HP on my 30' catamaran cruiser. I'm very happy with it.