Repowering 454 Merccruser on port engine of 1986 Carver

My initial reaction is that seems rich. You'll know better when the rest chime in.

Not sure why you wouldn't rebuild or buy reman long blocks.

The other question is how well do you trust your mechanic?
Unless you have a history with him, you should be looking for a second opinion.

Did your mechanic put oil in the weak cylinder and check the compression again to try to determine if it was a head or the rings?

What is "before this happened"??
Suddenly started running poor?
Or discovered and you did not know you had a problem?

Low lung compression can come from bad rings, yes but crank case pressure can help reinforce that theory.
A bad valve can do the same.
Leaking head gasket can do a low compression real also.
Bad cam lobe also.
Poor moon phase.
Poor install of the compression gauge.
Lots to check before condemning an engine.

I'd get another tech in there and shop for more quotes.

LBCs at 2500 hours are near but not at end of life (IMO). Lots here depend on previous operation and services.
If the boat is a keeper (for at least a long while), really need replacement, then replace them both with new engines and cruise with confidence.
Now, if the boat is really a keeper, You thought about repowering with a pair of Cummins diesels?

It’s a big price difference. You can get factory reman cummins with factory warranty and pretty much all new parts except for the block. I went this route 4 years ago to replace the Detroit Diesels with 6CTAs in my 53. On a 40 footer the 6BTAs would probably be enough but you re still looking at about $30k per engine and gear. Add new shafts, props, engine beds and probably new struts and shaft seals… it’s a $100k option. Not worth it if you use it as a condo.

I agree with the others, if you like the boat, patch it up or put in a long block. Before deciding though I d make sure the issue isn’t just a valve or head gasket in which case replacing or repairing the head maybe enough.

Actually you may find this hard to accept, but reality is, everything you describe is pretty well standard operating procedure. Done all the time, no big deal.
Speaking from first hand experience.

I don’t get it. Engines are under the salon floors, right? Carver didn’t build hatches in the floor to get the engines out?? That’s ridiculous. You should be able to get them out after removing the manifolds.

Get it diagnosed well before you start loosing sleep.
Heck, A short block may just go up the companionway...

Coach John... listen to what we're telling you, There are decades of experience on this forum.
To start with, none of us are convinced your engine is even dead, You need to confirm this doing what we suggested and not necessarily with your current mechanic. Once this is done then you know what your really dealing with.
The idea that you need to start cutting up your boat to remove a little gas engine is , frankly, hard to believe. The sole should lift up .
Removing the saloon window to insert a lifting device is pretty normal. Strip it down to the block and out it goes.

Diesels may sound nice but probably isn't financially feasible.