UGH!!!... Not a pretty problem.  You have a clue to the problem with the fact that it's the first time you started it since the winter. Winter is hell on I/O's.. just a small amount of undrained water in the wrong spot can crack a block. Fortunately, you're not in that bad a position IMHO. Blocks are waaaaayyyy cheaper than outdrives, and if you can do the work yourself you should be able to find a good block and get by for under $500. But I have to agree with Macojoe... patch the hole, get a bracket and an outboard. You'll thank us later..
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1987 V20 w/1987 150HP Yamaha on a Shoreland'r Trailer
1978 16.5 Airslot w/1996 120HP Force on a Four Winns trailer
1996 V21 w/1993 200HP Mercury on a Shoreline Trailer
All towed by a 5.7L Hemi Durango.
If God didn't have a purpose for us we wouldn't be here, so
Live simply, Love generously, Care deeply, Speak kindly.
(Leave the rest to God) 
Silence, in the face of evil, is itself evil. Not to speak is to speak, not to act is to act. God will not hold us guiltless.
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