I'd suggest doing a compression test sooner rather than later, this will tell you whether it's worth spending more time on fixing the engine. Given it's history of starting issues, poor compression does spring to mind.
Good point Mark, thanks. That came to my mind as well, but I have been pushing it down into my subconscious since a ring job does not sound like much fun. Of course, on a single cylinder engine, it might not be that bad. Do you think it is something that could be done in place, or would we have to pull the engine? The PO gave me the workshop manual for the MD5B, so it should be doable but getting the parts might be a challenge.
I am also going to look at the diesel in the tank. I don't think that it has been sailed that much in the past few years and a 15 gal tank of diesel could last... God, I don't know how long. How long is diesel good? I found a few things on the web that tell you what to look for if the fuel is breaking down or has grown organisms. So I will look at that. Any other suggestions?