I would try using the magnet as suggested. The piece isn't "in" the engine, it's in the flywheel housing. Chances are that by fishing a flexible magnet down thru the starter opening you'll be able to retrieve the piece. If not you will have to remove the tranny and the flywheel housing (if I remember your engine model correctly, it's been awhile since I've looked at one).
SV Laurie Anne
1988 Brewer 40 Pilothouse