Here's a small example of what things looked like before I started, cracks highlighted with a Sharpie pen so they're easier to see. The lower 1/4 of the transom was rotted, allowing the outer skin to flex. Gelcoat doesn't flex at the same rate as the underlying fiberglass layer (fiberglass is more flexible), so stress cracks appeared all over. I've fixed all my rotten wood issues so I'm ready to fix the cracks.
A note about stress cracks: they're there because your boat's hull is flexing (or was flexed from an impact or cracked from drilling) at that point. Unless you can stop the flexing, you're wasting your time fixing the cracks. They're not affecting the integrity of the boat, so don't stress out (pun intended) if you have a few. If you've fixed the flexing problem (as I have with my new transom installation), fix away.
I bought a quart of "neutral" colored gelcoat along with (2) 2 fl oz bottles of white pigment/dye and (1) 2 fl oz bottle of red from Jamestown Distributors. The neutral gelcoat comes with the catalyst and the prices were very reasonable. I didn't need that much white dye. 1 bottle was more than enough. It goes a LONG way. I typically would pour a hockey-puck sized blob of neutral gelcoat into the paint tray and use only 3 or 4 pencil-eraser size drops of dye.
For the most part, the cracks I had to fix were near the bottom of the drive hole, but I had a few damaged areas up in the red section of the deck where the boat had previously suffered some sort of hit (likely smacked the dock) and long cracks originating from where the pitot tubes had been installed by the dealer (and the gelcoat had been terribly cracked in the process). I also had a small chunk that'd been chipped out of one of the starboard side strakes.
I started my repair by using a die grinder with a pine-tree shaped grinding bit. A dremel with a grinding bit would work just as well, I think. I ground down through the gelcoat into the fiberglass and ground past the end of the crack as well. Going past the edge makes sure the crack can't continue to crawl. You don't need to grind deep into the hull, just through the gelcoat.
Next I feathered the edges out so there'd be more surface for the gelcoat to hang onto. I used the die grinder for this, too. Then I sanded with 220 grit paper to make sure there were no loose chunks and that the surrounding surfaces were rough for good adhesion.
After the cracks were prepared, I mixed the gelcoat with the catalyst and dye and applied it to the crack with a brush. It starts hardening really fast, so be quick about it. Get the non-sagging gelcoat and it'll stay put even on vertical surfaces.
To help fill the gouges and keep things in place while the gelcoat cured, I used wax paper and masking tape and covered the areas that I'd coated. I pushed the gelcoat I'd laid on the area into the crack, and worked out air bubbles that I could find.
After the gelcoat dried (with my 50,000 btu heater turned on it dried in about 30 minutes) I removed the wax paper and knocked it down with 220 grit paper on a sanding block. The result looked like this:
The gelcoat surface was really well matched to the surrounding area but the color was way off. Oh well, learn from my experience and make sure you use way less dye than I did, or spend more time matching the color. Either way, this is going to be visible forever. At least it's on the transom!
This process might need to be repeated a few times until you have the gelcoat at the level you want. I went back at least twice on most of the cracks to touch things up.
Air bubbles are your enemy during this process. Do what you can to avoid them by not stirring the gelcoat vigorously and when applying be sure to push it around with the brush. I spent much more time going back to fix air bubbles than I did anything else.
Once the gelcoat is dry and sanded, take a knife point and gently tap the surface of your repairs to make sure you don't have any air pockets hiding behind the surface. If you do, grind them out and re-coat.
I had some extra gelcoat in the paint tray and remembered I had a strake underneath with a chunk missing, so I fixed it, too. The process is the same. Clean the area (I use acetone), sand to remove any loose material and to blend the broken area into the hull surface, mix and apply gelcoat, cover with wax paper and masking tape, keep it at 70 degrees for a while, remove, sand, check for air pockets, buff.
I also fixed some corner damage, probably a dock hit. The red was a much better color match! Note my heating mechanism. Very redneck, very effective.
This picture was taken right after removing the wax paper. After sanding this one will probably need another pass with gelcoat as the damage was pretty extensive and I couldn't get the wax paper to mold the corner on the first go-around.
That's pretty much all that's required to fix stress cracks. They're not challenging by any means. The primary thing to work on is the color matching of the gelcoat. Your chances of getting it matched on an old boat are pretty slim, so consider that before you fix any non-essential cracks above the water line.
The last thing to do is buff things to a shine. Check the Buffing Fiberglass section for more info.
On to the next step: Re-installing the engine and drive