Dano,
That is scary how high your water line is! [img]/images/graemlins/shocked.gif[/img] You definitely need to get some weight out of the stern. Since you already have a closed transom, a bracketed O/B would be the best way of lightening the load. The favored bracket on this site is the Seamark. Check with
www.hermco.net for more info. This is a positive flotation bracket and would counter the weight of the engine. IMO, the perfect engine for this boat is a 150hp 2-stroke DI (choose your brand). With over 400#s of buoyancy, a single engine Seamark would work really well.