I owned a 1974 Catalina 27 with a tiller and 9.9hp outboard for nearly 10 years and sailed her all over the upper half of the Chesapeake Bay. The boat seemed pretty stout and simple in terms of systems, and I felt like she could take a lot more than the crew could bear, but some cautions:
- Anything 3ft and over started to be a handful though - the outboard would hobby horse in and out of the water if we had to motor or motor sail. She definitely was better under reefed sail than motoring with a small motor, and your little diesel will be similar, though the prop shouldn't ever come out of the water. Bear in mind that the chop on the Chesapeake bay tends to be short and steep, not at all like swell in the ocean, so that's a factor. But its no fun, and I wouldn't recommend it.
- The issue for the Catalina 27, and many boats of her size and smaller, is that as seas get bigger getting on deck to do anything you need to do becomes progressively more difficult and dangerous. If you have a roller reefed headsail that part is easy, but you'll still have to get to the mast to raise, reef, and douse the main (though lazy jacks can help with the last item). To do so safely you'll need to rig jacklines to tether to, preferably centerline because the side decks are so narrow and running them there is functionally useless. But I never found an easy way to do it on that boat.
- If you end up crashing through waves the anchor is typically installed in a bracket on the forward pulpit, which can fairly easily get ripped off in heavy breaking waves unless you find a way to securely stow it - or remove it and secure below in heavy weather. Perhaps later models had an anchor locker, but mine just had a hawsepipe for the anchor rode.
- The boat only weighs 6,000 pounds, so balancing the sails in heavy winds and not being overcanvassed is really important or you'll have awful weather helm and an uncomfortable (and very inefficient) amount of heel. I once broke the tiller at the (thankfully) end of a day of violating those rules.
The Catalina 27 was my first keelboat and took me a lot of miles, but it didn't take me long before I wished I'd bought a bigger boat like a Catalina 30 from the very beginning.
Have fun!