To the OP -
As a boater, if you sold me a boat that had a cracked block, didn't disclose it and you gave me your word that there was nothing wrong, that it worked fine, yaddy-yadda, and then it turned out you had lied (maybe unintentionally, maybe not), whether I would win or lose in court wouldn't matter. Whether or not I should have tested the boat and not taken your word wouldn't matter. Whether it would cost me a bunch on court costs and attorney's fees wouldn't matter. I would find me an attorney that would drag your butt into court so fast it would make your head spin. You'd get a demand letter to refund the purchase price of the boat or the cost of repairs and if you didn't... well... we'd be seeing each other soon enough.
Unless you are a morally deficient person, you should do the right thing and don't put these people through the misery and costs that they shouldn't have to deal with. You sold a boat with a cracked engine block, knowingly or unknowingly. If this person had tested it before buying it, you still would have had to pay for the repairs in order to turn around and sell it, right? Of course I'm right.
Not legally being required to pay for the repairs and not doing it because you can get away with it are two entirely different things but certainly not mutually exclusive. Sometimes, though, the court comes down in favor of the moral right so I would take my chances. You should do the right thing and either pay for the repairs or refund them the purchase price because really... you should (but you already knew that, right?).