Independent of trying to gain some compensation, you want to fix the boat, right?
I had an older Four Winns many years ago that suffered a microscopic fracture in the head in #3 cylinder (4.3L Vortec V6). This happened due to my own ignorance about never changing the impeller as the boat was five years old when it suddenly overheated.
Long story short, the engine hydro-locked every time I tried to start it, as water was filling #3 cylinder. This resulted in the starter mounts cracking, resulting in having the engine block re-welded.
When I finally pulled the heads and had them magnafluxed, the crack was revealed.
I sold the boat to a close friend with full disclosure, basically pricing it without the engine. I paid for all the repairs and it was running fine, but still couldn't sell it as a non-damaged boat. He still has it, and it's running perfect.
My advice, starting pulling parts like the heads, exhaust manifolds, etc. and have them checked by an expert.