I'd be concerned about ventilating an outboard prop in any kind of sea... Outboard props don't offer a lot of thrust when they're spinning in the air.
I've seen some success with Beta repower options as an alternative to rebuilding a tired block. You'll likely still have prop/shaft customization, but diesel inboard seems like a better option to me than gasoline outboard. I'd also rather have 400lbs centered above the keel than 200 lbs hanging off the transom.