Depending on your level of experience, you may be able to find the root cause of why you dropped the PTO piston, then decide if you only want to do the top end, which is a bit cheaper than a total motor replacement. In my experience, a large percentage of the time, you'll find it more cost efficient in doing the total engine. In the long run, it saves you time, and for a few hundred bucks more, you will have the complete engine.
This cylinder could have dropped for many different reasons. Whether is was an oil injector line break or stop up, the carb run lean, problem in the cooling system or just detonation, the root cause really needs to be found. If you lost that cylinder due to your carb, buy a new motor and put the carb(s) back on, it could happen all over again. So, try to find out as much as you can to the problem.
If the motor took a lot of wear from playing around in the water, it's possible it's a crank bearing, in which case, the new motor will be all you need to replace.
Good luck!!!