The M25xpb from an economics perspective would be a good choice, albeith a little on the small side. I'm currently repowering, but the old engine was a 32 hp on my 38. I'm not sure what you boat weighs in at, but the 32 hp was ok for my 38. As a reference point, but 32-2 motors at just under 7 knots and that was with a small two bladed atomic 4. At the rpms I was do that at, it was only putting out about 14 HP and that was sufficient to move the boat above hull speed. As noted above, I did take a big knock in any kind of weather, but I think that is more a function of have a 2 bladed prop opposed to a 3 bladed prop. Regardless of what you do, you will likely shave a few hundred pounds off the boat. I'm not familiar with the Volvo you have, but I do know that they ALL weigh a ton and parts are...$$$$$.
You have a really nice boat so just make sure you do the right thing. Also, the Beta engines are really nice, but no longer the deal that they were. They use to be 10~15 percent less than a Universal, but the change in our currency has made them about 10~15 percent more. I just purchased an M35 for 8500. I like the idea of a 4 cylinder opposed to a 3 since in theory, they should be a little smoother. Also, I liked the idea of have a to RPM of 3k opposed to 3600 for the Yanmars. The thought of running at a lower RMP hopefully translates to less noise.
Shaun
Ericson 38-200
S/V Sorcerer
Everett, WA