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I had a 1981 Catalina 25. Early Catalina 25s were made with cast iron keels, and they changed to fiberglass encapsulated lead keels in about 1983-4. I think the same is true of the C27. If so, I'd suggest that you take 2-3 hours to strip all the old antifouling paint off the keel using a paint stripper designed for fiberglass. It's made for glass bodied cars, and you can get it at a store that specializes in auto paints. (About $15-20. a gal.) Once the old peeling paint is stripped away, you can see what you're dealing with underneath.
Cast iron keels were generally pretty crude castings, and Catalina coated them with coal tar epoxy to seal the iron. Then they used fairing compound to fill all the depressions and smooth them out. If you strip all the old paint from the keel so that all that's left is the fairing material, coal tar epoxy and bare iron, and clean the bare iron with a wire brush in a drill, and then re-seal it with coal tar epoxy, replace any loose fairing material and then paint it with antifouling paint, that will give a good, reasonably long lasting result for most purposes.
I do think every boat with a cast iron keel should have a sacrificial zinc or magnesium attached, depending on whether it's in salt or fresh water, because it'll prevent any reaction that might cause damage to the fairing compound. As you noted, those bulges are hollow, and I suspect they're caused by an electrolytic reaction that causes gas to form and lift the fairing compound. I had them happen almost every year until I installed a sacrificial anode.
Last edited by Sailormon6; 03-05-2007 at 10:02 AM.