Re: To go 3.0 or not? that's the question.
The 3.0L engine is probably up there with the inline 6 cyl GM engines as some of the best engines ever put in a small boat.
The problem with them is they were never used in a car or truck. They were only used in boats, forklifts, and other industrial applications. So as a result, they're a little harder to find.
Block cracks are repairable (the right way....NOT with epoxy) and the rebuild facilities usually charge extra if they get a core or one to rebuild that is cracked.
http://www.usengine.us/mercruiser.html (scroll down to the 3.0)
Yeah, you can probably glue the block but the 3.0 engine usually cracks in a structural area (up under the manifold). This can cause head gasket failures later. (Do you want to go boating or do you want to have replace head gasket every summer?)
Some people HAVE successfully "glued" a block and had it work for years....

I wouldn't do it.......but people do it all the time........as long as you're not operating near a FALLS

, or out to SEA

......you're probably ok......Keep your cell phone dry!!

...
If you want to put a 4.3 in it, yes, you will need a different drive, bell housing Y-pipe,etc. The easiest way to do it will be to find a donor boat.
But you can also scrounge parts from Craigslist, ebay, marine wrecking yards etc too. If you're good at that, go for it.
If you're lucky, and there's nothing wrong with that drive you can recover some money..... and get a drive to match the 4.3, it should work ok....
The Bayliner Capri is a pretty nice little boat. I recently replaced a 3.0L engine in a newer Capri 2050 (that also had a cracked block) and it ran REALLY nice with the new engine.
With a 4.3L V-6 it will run even better!
You should be able to sell the Cobra drive you have. (I sold my previous King Cobra drive for $1400)
Since you're scrounging, look on ebay for Mercruiser parts and drives. It's not that hard to find used Mercruiser stuff, gimbals/drives/flywheel housings etc too.....except for the stuff bolted to them.....the engines are the same (GM 4/6/v-6 etc)
Good luck!
Rick