Jim, I, unfortunately, have performed the "surgery" you are speaking of. The only difference is that I did it to my 23 instead of a 15 or 17. To answer a few of your questions: My ballast was steel like yours. It was partially encapsulated in resin and partially loose. The resin had been poured in from the top of the cavity and never made it all the though the steel punchings 100%. Mine was also extremely greasy and I suspect that this was a residual oil coating that may have been on the punchings when they were obtained from the washer factory. Upon opening the side of the cavity some of the punchings flowed out like a slot machine. The rest had to be removed with an air chisel. I had 8 or 9 hundred pounds to remove. I think that the black liquid you are seeing may be the result of the water mixing with the residual uncured resin. My keel had begun to blister through from the inside of the cavity out and the black liquid was oozing from the large blisters. That was my first clue of major problems to come. Watch out! that liquid can actually squirt out at you and it is basically an acid. I got a shot right in the glasses, luckily I was wearing them. I replaced all the steel ballast with lead. I was unable to locate "scrap" lead and ended up buying lead shot. If you have to do this get ready to be flabbergasted at the price (at least I was). 1200lbs of lead cost around $1000.00. The process I used to replace the lead completely encapsulated 100% of the lead and filled the entire cavity 100% with resin. You will have extra space after replacing the steel as the lead is much denser and will not take up as much space. The good news is that it will concentrate the bulk of your weight even lower in the keel and benefit the boat's stability. I took advantage of some advice from Jerry M. and added some extra ballast to the 23 as they tend to be a little tender. I doubt that you would want to increase the ballast on a 17 or 15. You can fill the extra space up with resin. I also reworked the swing keel and replaced the bronze pivot and stop pins, lifting pendant, and keel brake winch while I was at it. You must find out where the water got in from and correct that issue. Even though you will no longer have steel to worry about rusting, you don't want moisture in the cavity that is going to cause it to blister out. My keel trunk had a crack right at the turn of the bottom of the keel up into the swing keel slot. There are pictures of this on my site. In my mind, most important is that you need to be patient with this repair. While you could probably do the actual work rather rapidly, you really need to get that keel open, remove the steel, and let it dry. The laminate that has been saturated is going to take a while to dry out. The test is to tape a piece of clear plastic on all four sides over the area in question. Let it sit overnight. If it has moisture on the inside in the morning the laminate is still wet. Don't seal it up like that or you're gonna have more problems down the road. It took months in Arizona's