I feel for you that this has happened, and speaking as an attorney, I have some general advice for you:
DON'T TAKE LEGAL ADVICE FROM ANYONE OVER THE INTERNET.
If you want to pursue trying to get money out of the PO, hire a lawyer. In the meantime, I think those that have given you some ideas here about how to proceed with fixing what you have are right on the mark.
This creates somewhat of a paradox. Should that prohibition include the above advise?
Anyway, seems like a pretty good guideline.
Having said that, here's my advise.
If you have the energy and the inclination, suing someone in small claims court can sometimes be a very interesting experience.
If, as you say, someone heard the seller tell you that the engine was running and is willing to testify to that effect, and the fact that the engine be running was a condition agreed upon and that can be proved, sounds like you have a pretty good case.
Depending on how well you can document everything and what kind of mood the judge is in that morning, you could even win your case.
Then of course you will have to collect.
What I have learned, painfully, is that anyone who is willing to rip you off in the first place is not a sure bet to pay you, even when told to by a judge.
If "the principal of the thing"
is important enough, then go for it. Who knows.
I had another thought. doesn't someone make a nice little diesel outboard? Maybe you could run it from the existing tanks.