I use to fill oil after each trip, why would you wait for the light??
that doesn't look to bad, but it will need honing, piston,rings, berrin. they also may be able to resleve it?? Nothing will be cheap, and might be able to find good used motor for less.
look for same year omc and you keep this one and have all the parts you will ever need
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1986 V20 
Old Fishermen never die, we just SMELL that way!!
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