What can be done about knocking on a 1989 Renken Seamaster fishing boat w/ mercruiser 4.3 v-6?

1989 Renken Seamaster fishing boat - mercruiser 4.3 v-6 - I had about $2,000 worth of work done to it, wires, gimbal bearing, ... I would have to pull the extensive invoice to list all of the parts, it included pulling the engine and out-drive off of the boat. The first time out the boat was run for about an hour when I discovered oil everywhere, the oil filter had a hairline crack and had been spaying oil everywhere and emptying the oil reserve. The mechanic said was now have either an "engine knock" or "rod knock". I was so discouraged that I tarped the boat and left it (I did winterize it and stabilize the gas). I see now there are a lot of companies offering remanufactured engines but I just don't know what I should do next. I really do not want to spend $3k to have a new engine installed... I don't know what is really wrong with the boat, what does running on low oil/pressure do? is this a knock scenario? Any thoughts, opinions, direction at all would be much appreciated. Steve