I had a similar decision with an 86 Evinrude 8hp. Decided to have the entire lower unit rebuilt. Cost about the same as getting a used one. I figured the devil you know is better than the devil you don't. The motor runs great and now has a rebuilt lower unit. I think the first thing you need to do is spend a little money to have the motor guy tell you what he thinks is going on and what needs to be done to fix it. Then you can make a rational decision. Good luck!