So you would be $4K in before you splash if you fix this boat. For $4K you could spend the winter shopping for a really nice, ready-to-sail boat. In about 6 weeks the market will become flooded with sailboats for sale. People will be saying to themselves.... I haven't gone sailing in years, I should finally sell this boat. They holdout over the summer hoping they will get around to sailing it again but ... they don't.
If you want to stick to the swing keel version, I'd recommend a MacGregor 25 or an O'Day 25, or a Catalina 25. There are a lot on the market, parts are easy to find and they are a lot of boat for the money.
If you want to include water ballast boats you could include the Catalina 250, or the MacGregor 26S or 26D (collectively known as the Mac 26C) I don't recommend the 26X or 26M. I am rather fond of the Mac 26C.
If you also include fixed keels you have a lot more options.
You could also spend the winter parting out this boat. The winches are worth a $100, the mast another $200. Bow pulpit and other knickknacks.... You could keep the outboard until you get your new boat and then keep the better of the two and sell the other for $300 - $500.
By the time you part out this boat, you might have 25% of the cost of the new boat and now you are only $3K into a newer ready-to-sail boat.
If you go this route, I recommend the SBO sub-site "Macgregor Owners"
MacgregorOwners.com classified ads, sailboats for sale
macgregor.sailboatowners.com
They have two Mac 25 sailboats for under $4K right now
They also have five Mac 26C sailboats ranging from $3,500 to $8,000
or
sailboatlistings.com
or
Craigslist
Wait until the end of September and you will have a lot more to choose from.