When we tried to start the engine (a good old Atomic 4), it turned over fine but wouldn't fire. Almost all of the valves were stuck. Since we would not be getting in the water right away, we decided to pull the engine and put it in the basement of our shop so we could do a good top overhaul and clean out the cooling passages.
Easier said than done. The boat had been built in layers. The engine had been installed before the deck assembly was lowered over it. The engine mounts (1/2 inch plain steel threaded rods) were too long to allow the engine to pass over them and under the lip on the inner deck pan below the companionway. (I later determined that the section of the inner deck molding below the companionway was not needed and removed it as part of the interior reconstruction.) Access to the under side of the forward bolts was non-existent. I ended up welding a length of 3/8 inch rod to the side of a socket and cutting holes in the front of the engine mounting bed in order to get the nuts off the bottom of the mounting bolts (see picture).
We eventually pulled the engine out (with the help of a local contractor's boom truck) and built a cradle to hold it. Over the winter, I pulled the head, manifold, all the valves, and the water jacket side plate. The valves just needed to be cleaned up and lubed. We also did a little grinding with valve seating compound before putting them back. It helps to have the proper tools. See Don Moyer's excellent maintenance manual. The water passages were completely full of rust and debris. The water jacket cover plate was almost rusted through so we replaced it with one of Moyer's parts. We also found that the alternator mounting plate was bent (this is also the lifting eye for the engine). Apparently someone at the factory had lowered the engine into position, bolted it down and then tried to take the hoist away without unhooking it from the engine. The bracket could support the weight of the engine but not of the whole boat. The alternator had never been aligned properly since the boat was new! As part of the rebuild project, I welded another foot to the bracket (after straightening it) and used another of the mid-size head bolts to hold it.
While we were at it we decided to add a number of the Moyer/Featherman and Indigo kits. For the most part, these worked OK. We installed Don Moyer's fresh water cooling kit. This is the one with the raw water pump mounted above the starter and driven from a stub added to the forward end of the crankshaft. But by the end of the first season, I noticed a bit of a rattle from the engine. I thought it might be a valve needing adjustment, but it turned out that the drive stub had developed a bit of looseness and was wobbling. For the next season, I changed over to the Indigo kit where the pump is driven from the alternator belt. The two kits use the same pump so all that was needed was the new mounting kit. This comes with a neat tensioner for the drive belt. The heat exchanger is mounted on a small panel in the port lazarrette. We also replaced the alternator with a 65 amp Delco marine unit from a local auto electric shop, replaced the mechanical fuel pump with an electric unit (Moyer), and installed the Indigo electronic ignition kit. UPDATE: We have since replaced the alternator with an 85 amp Balmar unit with smart regulator. This requires a heavy duty drive belt, not the fractional horsepower belt of the original though they are the same size. They are readily available at NAPA.
Other changes include a new engine mount system. I made up a pair of mounting rails that sit under the crankcase flange with welded-on tabs that rest on 4 resilient mounts. There is just enough room in the engine bed to accept it all. I did have to build up the starboard side mounting bed to level it and cut away some of the after section to clear my new rails. I never heard the original setup run, but this seems to be very quiet. You can put a finger on the mounts and feel how much vibration is now not being transmitted to the hull.
We installed a Vetus waterlift muffler in place of the old jacketed exhaust pipe. I did not feel comfortable trusting the old unit since there was no way to inspect it for corrosion. The original hard mounted exhaust system would also have negated the advantages of the new resilient engine mounts. Other changes included making up a mount for the engine end of the shifter cable from a length of angle iron and bolting it to the engine using the two port side bolts on the transmission cover. This replaced the rusted steel angle that the factory had installed on the side of the engine compartment.
While the engine was out, we removed the old shaft seal and found that the shaft had been badly scored. We had the shaft built up with metal spray and re-installed it using a PSS dripless shaft seal and a Drivesaver coupling. The shaft strut showed signs of being loose, so we removed it and rebedded it. The cutless bearing looked OK. After a full season it was working fine until a line wrapped on the prop and loosened it again. (The Drivesaver self-destructed - exactly what it was supposed to do.) We had a new strut made up from 1/4 inch stainless plate with a wider base and larger bolts. Two disk shaped zincs are bolted on either side of the strut to protect it.