To answer the question, Mercruiser offers the 1.7 Diesel, 120 hp with an Alpha 1 Gen II drive. By the year model of your boat, you don't have an Alpha drive unless its been swaped out(easy task, just takes $).
http://www.cmdmarine.com/engines/rec...mer17-120.html
Anything bigger and they want you to use a Bravo drive. If you have to change out the drive, If have to change out the drive for anything bigger, you may want to change to a Volvo SX type drive, they fit teh same hole as a mercruiser, but are generally stronger than the Alpha.
http://www.volvo.com/NR/exeres/0BD9B...82D2E97EB7.htm
You may be able to find an older AQ type set up, it requires a bigger hole, so at least you won't have to add transom, just cut out more, but be aware that the older diels are not as efficent in the hp size you are looking for
http://www.yanmarmarine.com/uploads/.../BY/4BY150.pdf
heres a Yanmar for you
Let us all know how it works out for you, were all interested.
BTW, a freind of mine in NC used to build comersial net boats, he configured one of his 21 ft net boats to use a converted Izusu 4 cyl engine hooked to a Kodiak jet pump, he only built one of them, he sadi teh performance was ok, it was just converting the engine that was the pain.