Fit a 235AD...
Electric Fuel Pumps - Stewart Warner
...to pressurise your fuel system and you will never have an air leak again. If the fuel system leaks, you will see the diesel dripping out and you can fix it.
The motor is sound, and oversize pistons were available from Mahle in 1998 and probably still are. Two pistons will cost about £100 each, and a top end gasket set about another £100. Reboring the two barrels would cost about another £100.
You could re-cut and re-grind the valve seats also.
You don't even have to take the motor out of the boat to do it.