http://www.firstmatemarine.net/This is where I bought mine in prior boat in 2009. Been around for a while, reputable and comes with warranty if work signed off on by certified mechanic for merc/VP marine. I had the 5.7 Carb mercruiser in prior boat and total cost was around 2500 and that included lower unit service, gimble and bellows replacement and Carb rebuild....mechanic moonlights at his home garage.
Swap over parts included exhaust nanifolds, Carb, oil pan, water pump (I got new one), power steering pump, brackets and new motor mounts....can't remember about distributor....basically you get two motor stands and unbolt and rebolt...replace water pump so you don't have to worry about it....then break it in as instructed.
It came with a checklist for proper install requirements. There are a few specialty tools such as engine alignment tool. If not set up for it I would suggest a mechanic with marine experience.
I wouldn't rebuild personally unless you plan on beefing the motor up. It will cost same if not more otherwise and a lot of work. Unless of course that is fun for you to do....i have rebuilt a few motors in years past and getting heads, block, crank etc all machined and resurfaced...new pistons/rings/bushings and ring insertion tool, pullers, ring clamp tools blah blah blah can get pricey if your not setup for that already....and no warranty.
If you were to jump up the HP too much you may be overstepping limits of drive system....that turbine idea would be good if you never want to talk or listen to anything:-)
Others have used some other marine rebuild companies but I can't recall the names.