First off, don't try and start it even if you get it (externally) cleaned up real pretty.
I would start by pulling the carb off and getting a look into the lower crankcase. If there is muck, sand or general "cooties" in there, the motor could be salvagable but it will have to be completely torn down and meticulously cleaned. If sand/muck got into the bearings, then even trying to turn the flywheel by hand could cause significant damage.
If you can do the work yourself a powerhead gasket kit and a seloc's manual might run you a hundred bucks or so. A shop would probably want close to a grand to do the job - at which point you would have to weigh that against about 2K for a brand new 25 horse motor...