’84 2001 w/rust on the engine

Hey all,
I just looked at a 1984 2001; I've sort of got my heart set on that model(not necessarily that year) and I've been looking for one for a while.
Stuff that looked good: guy said exhaust risers/elbows are about three years old, and he has the paperwork for it. The floor felt totally solid. It has a fresh water cooling system (I'll be using in salt, mostly).
The bad was: engine showed 1600 hours on it. There was a bunch of rust on the staarboard side of the engine, down low around the oil pan. Also, the transmission looked like it had been painted (roughly the back half). This was at night; I'll have to go again during the day to get a better look. The tranmission thing kind of throws up a red flag; I'd assume it was painted to cover up being rusted to hell, but I don't know...
About the engine, since it's got the closed cooling system, I assume the inside is fine (rust-wise), but should I be worried about the outside? Is that a big deal?
I'm going to go look at it during the day, do a compression test, and take it out on the water.
Just sort of wondering what people think about the hours on the engine and the exterior rust.
Thanks,
Jared

How much is he asking?

Ad said $5900 OBO, I'm sort of hoping for more like 4,000. The trailer looked pretty crappy,too.
I'm want to go look in the daylight, do a compression test, take it on the water, and see what he'll do about the price...

OK so I took this boat out for a test drive, did a compression test, and looked it over a little better. The floor seemed totally solid, I checked the bolts in the stringers and they all seemed fine. In some places (like where the carpet hangs over the floor, under the engine box) I could actually pull the carpet up a little bit and see the floor; it looked fine. The boat ran really well, except:
1) With my hand on the wheel it felt fine, but as soon as you let go the boat would pull hard to the left. Everything on the bottom, visually, looks fine (as in, fins/rudder/prop lined up and pointing straight). Any thought on what could cause this?

The compression test was iffy. The cylinders read: 130, 125, 90, 122, 125, 122, 105, 112. Some of the spark plugs had what looked to be oil on them (but unfortunately, I didn't note which ones). I didn't try adding oil to the cylinders and re-testing. I'm guessing this suggests it's a problem with the valves' seating?

So... any thoughts on the steering thing, and should I expect to get a year or two out of the engine before having to do something major? If I took the head off, can I just take it to someone to check out/fix (is so, how much does this cost)?

Thanks in advance,
Jared

keep looking