While no-one can tell for sure from a
single picture, unless by 'coastal cruising' the
surveyor meant within the
Puget Sound area, and
not the open coastal ocean north or south of Cape Flattery, and especially if you're new to
boating, I might be searching for a new
surveyor...
At the very least, the rudder shoe needs to be pulled, which will tell you several things; what is the condition of the rudder pintle or shaft, is the deadwood that the shoe is secured to
wood or
fiberglass, and its' condition (I'm assuming the
boat is fiberglass), what are the condition of the fasteners, etc.
When you say 'leak', is water pooling inside the
hull, where it can be pumped out, or is it being absorbed by the
core material where the rudder shoe is fastened?
As noted, the prop is also a mess and should be checked for de-zincification.
The 4108 is a good reliable
engine and from the couple of pictures of it, it looks fairly well maintained. There is a lot of
corrosion around the
raw water pump that needs to be looked at as it probably indicates a leaking cover plate, and an impeller check and (probably) change would be a good, inaugural
introduction to
engine maintenance...