As suspected, the foam is totally waterlogged. Also, the plywood covering it is totally rotten up to the bulkhead. Strangely, the stringers *look* like they are ok. I'll have to drill to be sure, but they look and sound good when tapped with various things.
I hear a lot of bad things about Bayliners, and there's certainly some shoddy work here. However, the hull is very solid with no flex, even on a roller trailer. All the wood that matters is in reasonably good shape, 26 years later. I've worked on 15 yr old boats in worse shape.
Anyway, lots of room for improvement. I have to remove all the foam and rotten wood to see what I've got. The transom and both bulkheads have enough rot to justify replacement. I think I'll be adding at least one more bulkhead, just to feel good about it. I'm going to pull the tank, wash it out, sand and paint it. Might foam it in underneath, depending on how much room there is... it's a tight fit.