The more I read about Farymann engines, the more I realize that it would have to be scrapped. Apparently, it wasn't that good to begin with, and the parts are not produced any more, so it would be an uphill battle. The price already reflects that fact, so it won't go down (it's already pretty damn low, considering the condition of the boat).
At this point I think I'll go for the Cal and use the outboard to start with (I won't go far in the next few months anyway
That would give me time to properly research and build an electric drive system, which should suffice for my purposes and still be much cheaper than a new diesel. I might even keep the outboard as a backup! The old diesel might even provide some parts for that, like a shaft coupling.
As for starting with a dinghy, my first try at sailing was on a 14' dinghy, and I didn't much like it. Just couldn't get over the need to always watch the boat so that it wouldn't capsize. Besides, I was led to believe that dinghy sailing skills are not directly transferable to the keel boats...