Damaged cylinder and piston. Need advice.

Bought a 1982 Ranger boat with a 1982 Mercury 150hp Black Max. Turns out the piston was not the only part destroyed (as previous owner mentioned), but the cylinder was also damaged. I have removed the piston cover (correct terminology?) and then the broken piston. Pics show the damage and I am wanting to rebuild if it is reasonable. I am mechanically inclined with years of automotive knowledge. With that said, I would like to do the work myself where possible. Do I re-sleeve the cylinder? I need some direction and advice? I think I need a service manual too. Thank you to all who help and unselfishly give good advice.

Starboard side of engine with cover removed
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1426.jpg

2 pictures of the cylinder
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1427.jpg
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1428.jpg

Piston cover
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1430.jpg
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1429.jpg


Other 2 cylinders and pistons on starboard side
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1434.jpg
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1435.jpg

Carbs, with close up of top carb
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1431.jpg
http://i189.photobucket.com/albums/z171/schmiddr2/CIMG1433.jpg

Re: Damaged cylinder and piston. Need advice.

I will help as best I can. First off it's pretty obvious the rod is also toast. Replacing a sleeve takes special machining and most automotive shops won't be able to do it. You need to send the block to a outboard machine shop and have it done properly. You need to finish dis assembly and determine if the rod damaged the bottom of the cylinder (ie: cracked or missing chunks). You also need to see if the crankshaft is OK, if not you might consider buying a rebuilt or used power head from a reputable source as the crank, piston, rod, machine work, gaskets and any other miscellaneous parts will get into the rebuilt power head range.
You need to determine what caused that damage. Do you know if the motor overheated? Did the oil injection pump fail? I see a bit of debris in the carb and that kind of tells me that the reed valves are also going to be bad. That motor is tired and needs a total rebuild. You're looking at $2k or more for parts and machine work.
I would recommend you find a good used motor on Ebay or from a dealer that has a good reputation. If you don't do this right it will blow up again and that really gets expensive.

Re: Damaged cylinder and piston. Need advice.

Thanks. I am going to call a couple of TN outboard machine shops and talk with them. I had an idea it would be a rebuild, but I didn't want to believe it. Although, it would seem that I could have the cylinder bored and press in a sleeve, new rod, piston/wrist pin, and be okay. Maybe reeds. Good compression on other cylinders.

But, what caused the problem in the first place? The piston was busted up bad and had a jagged hole in it. I assume it wore out after a long time of running lean in that cylinder.

I might just part out that motor and move on to buy another.