To install the transom you're going to want to clear out a big space in your garage as this is a messy and space-consuming activity. You'll need a garbage can and at least one or two sheets of plastic to cover the floor under the boat and under your workspace to catch any stray epoxy. You also need latex gloves of some sort. Epoxy-resin sticks to skin.
I cut out three transom boards from 1/2" MDO plywood using a small saw. I cut the first piece a bit bigger than the cardboard template, then had someone hand it to me while I set it in place and began marking it with a pencil where it didn't fit. Once it was fitting really well (flat against the fiberglass), I ground it down with a 36 grit sanding disc on the 4.5" grinder.
Finally we broke out the fiberglass and epoxy-resin. Time to get messy.
I laid the first transom on the sawhorses and unrolled the fiberglass mat on top. Then I cut my first piece, leaving about a 6" lip of glass hanging over. I cut the corners so they'd fold in.
Then I coated that same side of the transom with West System epoxy-resin using a paint brush. This worked really poorly. I ended up using a squeegee (or a bondo/putty spreader) and that worked well. Dump the epoxy in big puddles onto the glass, don't dribble it out or you'll never get it spread out. Move quickly moving the epoxy into a large, thin film.
Next, I laid the fiberglass back on top, and poured then spread more resin on top until the glass was fully "wet out" and I had very few air bubbles. Then I went over it with a fiberglass roller.
Then I got in the boat, and had two people hand me the transom board, now wet with fiberglass and epoxy-resin. I set it in place and made sure it was positioned perfectly. There's really no chance to move it around once it's stuck, so be sure you get it right the first time.
From the outside, we took 2x4s which were the length of the back of the boat and placed wax-paper between them and the hull, then used long screws and screwed through the 2x4, through the fiberglass (using existing holes), into the transom board and snugged them up really well. Not incredibly tight, just snug. After a few minutes epoxy-resin will begin to dribble out the transom holes. Be ready to wipe this stuff up. Cleaning it off the boat later isn't much fun. If you do find cured epoxy stuck to your exterior hull, use a razor blade and carefully pop it off. It shouldn't be stuck to the gelcoat (it's too smooth).
Finally, as you can see in the picture above (the picture taken from the inside), I went inside and applied more epoxy-resin to the 6" lip of fiberglass still hanging from around the transom until it was also completely saturated.
After that the process is repeated 2 more times. Make sure you clean the surfaces you're about to stick together. No burrs, no dust. They should be well ground (36 grit paper) and test-fitted. For the third sheet, you may find (as I did) it's easier to clamp it to the 2 other sheets with wood screws from the inside, seeing as the transom should be thick enough that a typical drywall screw won't pass through the back of the boat. Be sure you check the length of the screw before using it. I mistakenly grabbed a long one and zipped it right through the back of the boat.
Once everything's cured and the screws and clamps are removed, use a wood boring bit (I used a 1" bit) to drill through the center of the drive hole. Then take your sawzall and roughly cut the opening, leaving around 1/2" to the inside so you can fine-tune the opening with a second pass. It should look like this after your rough cut:
Ahhhh.... look at that nice, clean, dry wood! That's a good feeling. Also notice how crooked the cuts are; that's why your first cut should be "rough" or inside the lip by 1/2" or more. Sawzalls are not precise instruments.
Take a look here, too - this is a section of what I cut out. Notice how you can see the epoxy/fiberglass between the sections of MDO. There's no air gap (indicative of good clamping), and you can clearly see the 21 plies (7 per sheet) of MDO strength!
Once you have all three pieces installed and the epoxy is cured, you'll want to mix up a batch of peanut-butter-like consistency epoxy (I used the West Systems filler material that I got from a local fiberglass guy - he put a bunch in a ziplock bag for me) and fill the gap around the bottom and sides of the transom while leaving a "fillet" along the edges. I liken a fillet to what you do when caulking around your bathtub or sink - leave a curved surface to the goopy epoxy and it'll make it much easier for the fiberglass to make the 90 degree turn. It's also an excellent sealant and plugs up any water channels that might exist. I didn't fill the gap in the sides of the transom all the way to the top; that would've required an extensive amount of epoxy. Instead, I filled up to a 1" gap, then used regular epoxy on a brush and slathered the whole area, especially the end of the boards.
Once the fillets were done, I took a 12" strip of glass mat and 'glassed the transom to the bottom of the hull, then spread a thin coat of epoxy all over the transom, especially the sides and top to seal the boards.
Last thing you need to do is finish-cut the drive hole by test-fitting the gimbal housing (with bolts) until it fits snug up against the back of the boat with no interference. When you lay the transom plate in place from the inside it shouldn't rock back and forth. The surface should be flat. If it's not (mine was high by about 1/16" in the upper right) use your grinder to bring down whatever area is too high until there's no movement. Also, make sure you carve out the top to provide clearance for the steering arm. I used my 4.5" grinder with a sanding disc on it.
I found out after this picture was taken that the transom was about 1/4" thinner than it needed to be. For both Mercruiser and OMC stern drives you need 2 to 2 & 1/8" between the inner transom plate and the external gimbal housing or you risk bottoming the driveshaft out in the engine coupler. That's a bad thing. The fix is to glass on a piece of 1/4" plywood to the inside of the transom. This might seem like a "quick fix" but it's quite normal, and just like the factory did it in my boat. If you put one of these in, make sure your inner transom plate doesn't hang over the edges before cutting the wood.
If you want, coat any exposed wood with epoxy. I did; that should help ensure the wood doesn't absorb moisture in the future.
Transom is done!
On to the next step: Rebuilding the Stringers and Battery Trays