They built quite a few 20's with I/O's, and that motor of yours is probably lighter than the 140 MerCruiser commonly used, so it's probably feasible from a weight standpoint, but you'll have to be careful with CG location. Carl Moesly told me the CG on the 20's with 4 cyl. I/O's was actually further forward than it was on the outboards with mid-60's O/B's that were under 300 lbs! It will be even further forward on a straight I/B, so that will be a challenge! Maybe a V-drive would help that. Also not sure where you'd put fuel tanks, but I think they and the batteries would want to be aft of engine. The 23 I/B's with the prop pockets have a reputation for a great ride but are not very fast, maybe because they run with so much hull in the water. The 23 is a much bigger and deeper hull, so better suited to a prop pocket and less sensitive to CG.
I'm guessing you want to leave boat in water all the time, because otherwise an I/O would perform and maneuver better, at the expense of corrosion issues. While the pocketed prop reduces draft and improves the thrust angle, a small high speed prop isn't very efficient and may lose most whatever you'd gain with the shallower drive angle.
Maybe what you really want is a jet drive! It's not efficient either, and don't know how they deal with corrosion issues, but they seem pretty simple and rugged, and might solve most of the other problems related to a pocketed prop! Would also be a short drive train that would help with the CG issue. The USN loved 'em on the river patrol boats in 'Nam! After all, you can build anything if you throw enough time and $ at it! It would definitely be one unique rig!
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