You seem pretty interested in this particular boat. It's got alot of room inside, and you like the cockpit. Do you like the boat for what it is, or just the price?
What problems do you know about other than the engine? There could be many, or it could be a really nice boat with a blown motor. What exactly is wrong with the Yanmar?
You haven't mentioned the price. IMO, if you can't buy the boat and repair/replace the engine for 20K, look for another boat. If that is more than your budget, look for another boat. If this is possible, I'd go for it. It's a nice boat for that kind of money....if you keep the inboard (and nothing smaller than the original engine).