I would say it is a bargain, unless there is severe damage to the interior or severe water intrusion into the core of the hull...Even that could be fixed fairly easily--pull out all of the wooden furniture, and then pull the floor and re-core.
If the interior is trashed, then just use the old for templates, and build a new and lighter interior. (See the thread on "HawesPiper interior mods.")
In any case the wiring should probably be replaced.
If an engine is submerged, it should be kept in fresh water, until ready to do the proper pickling. (the sooner the better) The oil drained, and and the engine flushed multiple times with first diesel/oil, then light oil, and then several flush of oil. Squirt oil into the cylinders and turn over by hand during each of the flushing. Finally fire it up--but usually ECU and the electrical components have to be replaced.
Sounds suspicious "tied up wrong, engine running, and sank?" There is much more likely to be engine damage from ingestion of water, (one cyl firing when the other has filled partly with water comes to mind--crank and bearing damage?) I would tear the engine down completely if you want to try and salvage it.
There are boast which have to be repowered going for many times the 5K...