Dude - if you are going to spend $1300 overhauling your existing drive, A N Y chance you can spend more and convert it to a mercruiser? I don't know all that's involved or really where to begin but you should make some calls & get some prices if the wallet allows...
http://www.dougrussell.com/Products/...ory=2&Brand=74
$1300 does not seem bad - what's the warranty?
Here is some more:
http://www.stores.ebay.com/tcelectro...pt0/page2.html
http://www.sterndrive.info
http://www.google.com/search?q=%22re...&start=10&sa=N
What year & model outdrive??