HI WeMet,
I've always liked the PSC 25. They are neat boats. Are you looking at a Mark 1 or a MArk 2 (with bowsprit)?
My suggestion regarding the little Yanmar is to have it carefully checked during survey (you
are having a survey, right?). If it is running well enough, perhaps you could hold off on replacing/rebuilding it for a while until you get to know the boat better and prioritize your upgrades.
If it turns out the engine does need replacement, the good news is a reasonably handy person can manage an engine swap. Especially one that involves a smaller (i.e., lighter) engine like this one. Yanmar still makes a one-lunger (single cylinder) diesel, so you could go with a direct replacement with the later version of your engine (1GM10).
Or -- and this is probably what I'd do -- you could bump up to a small two cylinder like the Betamarine 10 (
Beta Marine US Ltd. Distributors for Kubota based marine diesel engines and generators for sailboats, yachts and trawler boats.) or Betamarine BZ482 (
Beta Marine US Ltd. Distributors for Kubota based marine diesel engines and generators for sailboats, yachts and trawler boats.) or a bit larger Yanmar's 2YM15. The advantage with bumping up to a two-cylinder is more, smoother power, and the ability to have the engines cooled via heat exchanger rather than raw water. Cost-wise, I'm guessing about $5-7K for these smaller engines brand new.
There is another Sailnet member named Brandon (I think his screen name is "Snider"?) that just bought a PSC 25 a month or two ago. He is deep into a refit. It might be worthwhile to track him down and exchange notes. Best of luck to you.