I recommend you call Joe Demers at Sound
Marine.
When my KBW-10 bit the dust this fall, I talked to a lot of activities about options and got the full gamut of responses.
Based on an
internet search, I found Sound
Marine and decided to call and talk to them.
I talked with Joe on the
phone for about 20 minutes about my options, including rebuilding the transmission which is of similar vintage and parts status as yours. He quoted $1K to to $1.5K as an estimate for
rebuild.
He seems to be very experienced and was very informative and candid about options, and if I hadn't decided to bite the bullet and install a new Beta, I would have had him rebuild the transmission.
No affiliation.
Break/break...based on my experience and
research on the KBW-10 and transmissions in general, I would recommend replacing the damper plate and running the HBW until it dies, which may be never. These transmissions are robust and if the
oil is changed frequently they will last a long time. Mine was 41yo and I abused it badly with infrequent oil changes and long
layup periods. I would have rebuilt the transmission myself but for the need for special tools that I don't have and don't have access to.
Replacing the damper plate is about a 2 in difficulty on a scale of 1 to 10, and not too costly and I recommend you do that and run the engine and see if you're satisfied and your noise is gone.