The 3208 is a dry sleeve engine. If you have any piston damage then you would have to re sleeve meaning you would have to pull it out to do, It was a good engine the main problem as with a lot of cats is a wrist pin failure caused by running the engine over rpm. I would find a good retired Cat mechanic that has the ability to pull and re do the engine or find a replacement engine. This engine was also used in some trucks so if it is a block then you might find one at some truck supply and hang your marine components on it. If it is a wrist pin your block could be good. What will cost you is the labor. Get a good Cat mechanic to look at it lots of time just running it he can diagnose it by listing to it however a fuel knock and a wrist pin knock sound about same, This engine is no longer manufactured but it was a good engine.