I know what you're going through. Been there and done that. I had to replace the engine in my last boat on very short notice. (milky oil at the beginning of a season) I was fortunate to find a performance engine builder who happened to have a low hour 305 small block which he had just pulled from a customer's boat he was building up. Seems to me, it was a late 80's or early 90's vintage like the one you are dealing with. The price was right and I thought I'd be back on the water in 24 hours. The engine was totally complete and assembled except for the flywheel, bell housing, and starter motor. As it turned out it was a much newer block that the one I was replacing and the flywheel, bell housing, and starter motor from my old engine would not fit. The engine builder found the parts I needed to complete the installation but it vibrated like crazy. He said it was probably the wrong flywheel and he gave me another which also vibrated. He then said the same thing your engine builder said about some of those engines were internally balanced and the fly wheel should not be counter balanced. He machined one of the fly wheels to remove the counter balance and then balanced it. It too vibrated. After trying 6 or 7 variations of flywheels he had laying around (I got pretty proficient at pulling the engine that year), I finally gave up and went to a Merc Cruiser dealer and tried to order a new flywheel. He told me that Merc Cruiser listed numerous flywheels for that vintage of engine and that the only way to get the proper flywheel was to get all the numbers from the engine and call Merc Cruiser directly to identify the proper combination for that particular engine. Sure enough, the flywheel they sent ran smooth as silk.