Volvo Penta MD21

[Latetonite1]

Hi everyone,

I am the owner of a 38 year old boat, equipped with a Volvo Penta MD21A.

Last winter, the engine was running fine, and I left the boat in the water in Greece, as usual.
I went abroad for 6 months and had a friend looking after the ship, including running the engine once in a while to keep the battery charged.
The engine has been producing always kind of white smoke, reason unknown.
Upon return last week I wanted to start the engine, but it did not turn over.

I suspected low Batt, and bad connections to the starter.
Also found slush in oil carter, and brown rubbish in oil filler opening.

I now am sure there is water in the engine.
Mechanic 's verdict after 2 min: exhaust cooling water returned to exhaust, and engine is ceased.

I am not sure about this, as I do not believe this water came in the cylinders.

As I wanted to overhaul the engine anyway during coming winter, my question is:

Shall I have the engine removed and rebuild, or shall I look for a second hand one.

Can the engine cease cause of water in carter without running?
And then, ofcourse, what will be the approx cost of either choice?

Your input is highly appreciated,

Thanks.