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How to choose replacement engine on '93 echelon

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I've got other threads on here related to my 1993 Echelon issues.  Due to a variety of issues that did not allow me to work efficiently on the boat; and the last oil change was nasty, I took the boat into the shop.  As expected, the news I got today was not what I wanted, but what i expected.  Compression all over the place with a low of about 110 (pre-oil) that came up 30-40 psi with oil in one cylinder upto 190 - 200 on others.  There appears to be water on the plugs when they were pulled, the most on #5 & #7.  Mech confirmed the block SN is the same as the arrestor.  Based on the work I've done to date and the conversation with the mech, I'm certain the engine is original to the boat.  350 Magnum Tournament ski carbureted - SN 0F16.....

All options are on the table at this point, but I think it's time for a rebuild or replace.  I'd hate to do top end work then have the bottom go.  And if there are ring issues, as indicated by the compression testing, I need to do the bottom end as well; might as well do the whole engine - it is 30 years old.

Mech is waiting to hear back on time and cost for machine work, etc. to price out a rebuild.  However, he's quoted about $6,800 for a remanufactured long block (waiting final confirm that it's the right set up for my OE engine) and about 11-12 hours ($1,500) to pull, swap, install, align, etc. once long block received.  Remanned engine has a 3 year warranty.  

Questions: 1) When searching for a new/reman long block, how do I know what is compatible with my current set-up, 2) I've heard I need to be aware of the cam and crank, etc. on the new engine, 3) If I don't currently have the vortec heads, and the new engine does, is that hard (expensive) and what parts would need to be swapped out, 4) does $6,800 seem high for a remanned long block (not sure of the source but OE mercruiser lists in this price range) and/or what other sites/locations would you look for a new engine.

Any other thoughts you might have would be appreciated.

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