Hi Michael,
People are repowering with electric. There are a few companies that are supplying "drop in" units and one-off home brew motor/mount/reduction assemblies happening around the world.
I installed a drop in unit from this supplier;
http://www.solidnav.com/ and really like it. Unfortunately they seem to be out of business.
Another manufacturer that I am familiar with and would wholeheartedly recommend is;
http://www.electricyacht.com/electric-yacht-products/features.html last I heard they have supplied about 90 units.
Here are some other companies:
http://www.advancedmarineelectricpropulsion.com/index_files/Page497.htm
http://www.ozmarine.se/OZecoDrive/Eng/IndexOZecoDriveEng.html
West Marine has an E-inboard offering but I haven't heard much about it.
Electric propulsion can be a wonderful thing; clean, reliable, quiet, powerful. If you mostly daysail/weekend, have shorepower and stay within 50 miles of home, to me it's a no brainer, electric works. If you cruise and motor a lot you need to plan on having way less motoring range and/or a generator. It can and is being done but you need to be aware of the limitations.
I've got about $6000 into my electric repower, that's for an E27 and I did the install.
If you are really thinking about it contact Scott and Bill at Electric Yacht.