Re: How bad is this 1985 Johnson 140HP V4 VRO???
You have detonation damage. Rebuild is a necessity. Go the whole route. Have crank, rods and block checked by a competent machinist, familiar with two stroke engines. The block looks dubious because of the erosion near the sealing areas. When you have it rebuilt find out why it failed. Timing. Fuel. If you put the same crap on as far as accessories you will burn it down again. You've got to know exactly what caused the detonation.
Detonation you may say. It can be identified by the erosion of the aluminum at the exhaust port. This started the damage and accelerated it while running. It being the top cylinder, I would look at timing. Perhaps a pack this is double firing. The boat may be overloaded and not running at W.O.T. well. What was the W.O.T. speed?