I take it the engine still runs. If you have 'Winter' where you are, that's a good time to pull the engine and get it someplace to work on until the return of sailing season.
There's a lot of corrosion there - the head corrosion is unusual. My question is: What's dripping on the engine?
Don't let the corrosion scare you. A little iron make a LOT of rust. You've got your work cut out for you cleaning that up. Buy a face shield or at least safety glasses with side shields. Like the safety poster says 'Protect your eye'.
Head may not be toast. Depends on what happens when you remove the spark plugs. They can be removed - it just depends on how much of the head goes along with them.
Removing the engine from a Cat27 is a challenge - no experience with that, just glad I had a Tar30! There are Cat27 folks here who will guide you.
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