Peter - thanks for the info. I showed the buildup on the chainplate and behind the rudder gudgeons to a friend of mine who used to build boats. He was amazed that the boat was built with plywood over balsa core for areas that have through bolts. The reason is the balsa core does not offer strength against compression when the bolts are tightened. He recommended that for the areas where strength are needed, glass in some flat fiberglass sheet and build it up with biaxial cloth & resin so it is the same thickness as the balsa around it. Here is the material he recommends for the fiberglass plate: http://www1.mscdirect.com/CGI/NNSRIT?PMAKA=63414585

This is the recommendation he made:
Make up the difference with wet laminate - 3 layers beneath the Fiberglass block plus 3 on top for strength. These layers will be just extra reinforcement on top of the 2 layers across the transom prior to balsa and the blocks plus the 2 layers over the top of the balsa and blocks. Hope this makes sense but this approach will be the simplest and will be stronger by far than what was there.

Note that he recommended that I add a couple of layers of 17 oz biaxial mat/cloth over the inside of the exterior skin since it is so thin.

I'm still in the grind out the old stuff phase :-(