I think the heads and block should be useable as long as it does not have any cracks. Yes, water can get in through the carb opening with no carb. I would replace the circulating water pump and exhaust manifolds and risers. Skidim has many parts, and I have used them quite a bit. However, for exhaust manifolds and risers, I found them cheaper at ebasicpower.com. Good luck.
1993 Blue Stars and Stripes Prostar Powerslot 351HO
Mastercraft: Face It - If you are not a good skier behind this boat, you are not a good skier.