Excellent work so far!
We're in the process of fixing our 18' holiday and had a very similar looking transom to yours.
http://forums.iboats.com/forum/boat...oliday-i-o-18-fishing-rebuild-pic-heavy/page3
Coloring was near identical... We thought we could get another season out of it but watermann convinced us to pull it and replace it. We're SUPER glad that we did. You can't see the inside of the wood until you actually remove it from the boat. And the weight difference between our new transom and the old transom is astounding. The old one was completely saturated with water. Weighs triple what a dry piece of wood weighed.
We have 4 stress fractures on our 18' holiday, and it's almost guaranteed that they resulted from a rotted deck and weakened transom.
We also pulled the engine, and are 100% glad we did. You do not want to walk in your boat without a deck on it. Next time you're outside, have someone walk around the inside of the hull. You'll see how much the boat flexes. It's scary. I have probably 30 hours of engine work (a lot of learning and google), and doing it inside the boat would have been impossible. The header alone weighs like 60 lbs.
It's intimidating at first, but once you get the hang of cutting the plywood & epoxying, it will make the rest of the restoration MUCH easier. At this point, we're flying through ours
Good luck!
-John