1985 Sea Ray Seville 21' Cuddy-Fix or Sell?

Hi. I posted on here regarding my Sea Ray Seville. My brother and I just bought it, and unfortunately were screwed...bigtime. We did not check its compression beforehand. Currently, it has a Mercruiser 3.7L 170 HP engine. The compression test came back as:
1-175
2-175
3-75
4-100

I know the motor needs a rebuild, but the marina wants $4000 to rebuild the motor. Another option he explained to me involved a 165HP Mercruiser engine that is slightly newer than my current engine with only 50 hours. He is planning on charging me $2000 for the engine, and $850 to install. Is this ridiculous? There aren't a lot of marina's around for me to shop around at. Would it be better to purchase a crate engine and have that installed? Is the boat worth fixing at all? I've been trying to sell it, had a buyer for $1500 but never showed, so I don't think I'm going to get a lot for it. I really like the boat, and the rest of it is in nice shape. I have attached pictures. Please advise me so that I don't get taken again! Thanks.

Re: 1985 Sea Ray Seville 21' Cuddy-Fix or Sell?

Well that's a decision u and your brother have to make. You would be cheaper off buying a crate engine and installing it yourself. It's going to be hard to get a decent price if it has a blown engine. If the oil isn't full of water i would start with removing the cylinder head and checking the head gasket between those 2 cylinders. You might get lucky and find it's only a bad head gasket. But the way i c things is alot of boats are on the market right now due to higher fuel prices and alot of people are trying to unload there boats so it's really a buyers market right now.