Jumping in a little late here. Without seeing it, but based on your description of the boat, I think you are wasting your money and may end up with an unsafe boat in the end, anyway. Donate this boat to a charity for a tax write-off or part it out to pay school expenses, unless you like VERY BIG challenges, are REALLY, REALLY HANDY working with fiberglass, etc, are willing to spend MUCH, MUCH, MORE than you thought, and don't want to sail until next season or the one after that!
1. I believe the flotation foam is closed cell and should not be waterlogged. The foam is between the pylons so would be very difficult to remove. Tilt the boat with bows high and let the water drain for a day or so. Make sure there is no crud clogging the drain fittings.
2. A 2.5 foot split/crack!!! Are you talking a thin, hairline crack in the deck gel coat or a crack in the fiberglass in the hull? If it is a crack in the fiberglass in the hull, that is a major structural issue that may not be worth fixing. It is likely associated with a major delamination in that area also. Tap on the hull all around that area and see if you get the dull delamination sound or the sharp sound made by a sound hull. That repair alone could be a major effort and cost you more than $250 in materials alone. Where is the crack located? If it is in the high stress areas near the pylons it is time to get a new hull. If the crack goes through both skins of the hull sandwich and the inside skin is cracked (the hulls are a relatively thin fiberglass-foam-fiberglass sandwich to save weight) you might as well look for a new hull or forget the project completely.
3. Depending on what you really need (sounds like a lot) you will quickly exceed your $250 max on just a few items- you need to get a Hobie catalog (or walk into a West Marine or check Murray's or Salty Dog online) and look at the prices of stainless steel rigging, shackles, fittings, blocks, etc. Based on your description, you need to replace all the standing and running rigging. Even cheap line packages can run $50 or more but they are cheap. Likewise, aftermarket wire standing rigging can be found for $86 (Salty Dog). I don't think I have seen a used but serviceable main go for less than $150 and that is for a tired old sail without battens or boom. A boom and battens can easily run over $100 for used ones and that may not include the boom fittings and batten caps. If you have a turbo 14 you will need a jib- a new, low cost, jib from Whirlwind will run $175 and you may need to fix or replace the furling gear- ka-ching$. On the new side, one new Harken block can cost $100 to over $200, and for a 6:1 low profile main sheet setup you will need two!!!!
It is not unusual for a person to buy a fair to decent used boat for under $1000, but spend another $1000 - $1500 for repairs and upgrades. You know the saying- a sailboat is a hole in the ocean that you throw money into- Hobies are no different!
4. Look at the classifieds here, on Beach Cats, Cat Sailor, Ebay, and Craig's list for used parts- but even those will not be cheap!
Before spending any money I would ask an experienced and long time Hobie owner and fiberglass expert to look at your boat and give you their assessments. Again, based on your description, I don't think it is worth the time and money to fix it.
You are welcome to stop by my place in Washington, NC to discuss these issues in detail and look at my H16. Sorry, at today's gas prices, it is a bit far to make a run to Oriental.
_________________ Alan
'86 H16, Sail #89057
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