higgs to answer your question,
The advantages of repowering can be summed up in time, effort and cost. The majority of these engines that to use your words "are shot" usually have a number of problems, from cylinders that are so worn they have to be replaced to worn camshafts, oil pumps, valve train, crankshafts, corroded engine casings etc. Unless you have a reliable engine shop that will be able to accomodate a small diesel you'll end up either doing it yourself or trying to find a good, honest mechanic. Finding and purchasing all the needed parts at retail prices will be costly and a chalange. Delivering cylinder block, crankshaft, head and valve components to be machined and rectified and then collected can be time consuming. If you do it yourself you will be further dealing with corroded and stripped bolts, unexpected complications and aggravation. By the time you add up cost, time spent and effort and the additional advantages of repowering I would say there is no contest. A brand new engine comes with a warranty, it will be a more modern design and it will add more resale value to your boat than a rebuild. If money is the issue and if only a rebuild is in the budget then there is no question rebuild it is.