Yes, you need a remanufactured block (crankcase = Block = same thing) or have this one machined to next oversize bearing(s) (machinsts decisions) and line-bored to make them all aligned straight in a row parallel.
Once the crank is finally bolted back in place, it should rotate quite easily, it shouldn't be difficult to turn (due to misalignment or clearance issues).
A good machine shop should be able to fit new oversize bearings, maybe they can turn your crank but it looks like the thrust surface is wiped out? A good machine shop might be able to fix this crank.
And wow, maybe it's no longer a big deal these days but I didn't realize this crank is rolled fillet. See the fillets crimped into both edges of the bearing journal? These are actually crimped there to make the crankshaft stronger. Used to be they only do this on serious racing engines. So if they turn the crank journal some og that will go away but looks like they don't have to take much off, the thrust surface is the worst part.
And the whole block has to be flushed and cleaned, all galleys scrubbed out using brushes and solvent and all bearings replaced and clearance checked due to metal bits everywhere. Plastigauge measurement is unacceptable for these close tolerances, they must use mechanical gauges. New oil pump, most likey. The connecting rods will have to be checked for straightness and straightened if they're bent. Equipment for straightening and resizing rods is costly, a good machine shop will have this.
So I'm not sure it's worth trying to repair this motor via a local machine shop vs returning it as a core to the remanufacturer and getting a warranty. The remanufacturer will have all the correct tooling to do this work.
I'm pretty sure the remanucacturer will be able to rework this block and maybe the crank too. A good fully-equipped and experienced machine shop should be able to do this work, but it might be his 1st Seadoo engine?
Funny thing, this year I replaced a couple mercruiser engines with "reman" from our supplier but actually they were brand new including the block, there were no recycled parts at all but they were offered as reman.
So what killed thisr motor, was the impeller loose? It looks like maybe it was, based on the crankshaft was shoved forward, the crankshaft thrust surface chewed against/through the thrust bearing and cut into the block web? This bearing shell doesn't look to have spun, another one did?
Anyway, good luck. I think this failure began outside the engine, not internally.
