Those go back a ways! I owned the R and Z versions but ran them in trucks.
As far as putting it in a little round-nose, go for it. They're not like the current engines with the HP and RPM that we have today but it could be a fun little boat. The OS's seem to have nice timing that seem to work well for boat use, a lot better than many other .12's that I've tried.
If my old brain can remember, I ran those engines around 1994-96. I've still got a Davis Diesel head that will fit on it. Never could get the thing to run right though.