Depending on your mechanical ability a rebuild is not that difficult really - just a step by step tear down, and replace what's busted as you put it back together.
Now, your model being a 1995 puts it right on the hump of can be rebuilt and can't be rebuilt.
If your serial number is 0G202749 or below it has the chrome plated cylinders which can't be bored or honed (if required). If it's 0G202750 or above it has the Mercosil lining and can be bored up to .030" over.
If you have the model that can be done I would first check for an aftermarket source for pistons and rings. Merc does stock them but you are looking at about 300 bucks a cylinder just for a piston and rings. If you crack her open you may as well do the bearings while you are in there (roughly 100 bucks all in) and then a powerhead gasket set ($110) - so you are somewhat north of 800 bucks for parts, plus 50 bucks a hole for a bore/hone (average shop price and not something you want to mess with - especially Mercosil - unless you have done it many times before).
Then you have just fixed the "result" of the "real problem", which was probably a cootie in the carb. So toss in a carb kit (another 75 bucks) and you are coming in at 1000 bucks.
Not trying to scare you away from it, but you can see it quickly adds up and personally I wouldn't spend a grand on this. That's about the going rate for a good used model.
You could strip out what's good, sell it on ebay/craigs list and make almost that in the parts (a working igniton is worth a couple hundred, 2-300 for the lower unit etc).
On the flip side, if you could find the pistons for half the OEM price and come in nearer the $600 mark for the whole thing - you would have a like new motor with a 20 or 30 year lifespan if properly cared for.
Personally, I would grab a Seloc's manual (excellent for doing a rebuild - about 35 bucks) or a factory service manual ($80 bucks but better if you are mechanically familiar with outboards) and tear her down and get a good look.
You can make your decision from there based on how much is toasted. If, at that point, you figure it's cost prohibitive (after pricing parts etc), then at least it's all torn down for selling off the parts
