I think you should be very careful with regard to fitting a heavy old engine into an Atalanta.
The Atalanta is a light weight high tech boat. It needs to be kept light for performance and safety.
Any second hand Volvo which is for sail cheaply will be for sale for a very good reason. The reason will make it uneconomical to repair.
The BIG issue when reengaging an Atalanta is shaft alignment. The original engines have little engine below the shaft line and will fit onto the shaft with a direct coupling. Any alteration to a different engine (one which was not fitted originally) is likely to require some complex engineering. A cardan shaft is almost certain to be needed, to enable an engine flywheel mounted higher in the boat to couple to the existing shaft. That consists of a thrust bearing, two constant velocity joints and a length of shaft. The engine bearers will need modifying and the lids which cover the engine will need raising to cover the higher engine. Make sure that any engine you buy is worth going to all this trouble and expense over before you fit it.
You might find that it is actually cheaper to fit a new engine! Or make do with what you have until you can afford the new one.
As to Solone, yes she does have a large heavy engine, and Dinah and I have sailed in company with her when Keith Viewing was still alive. She has many alterations which were designed for serious offshore sailing, and she does float lower than she should. I particularly liked the life raft stowage space. I know Solone can punch into a head sea under engine, but the downside of that is that Keith had to continue motoring in conditions where we were able to stop the engine and sail.
Finally while it might seem reassuring to have a powerful engine (it is reassuring and Calista has an 18hp engine) remember that the Atalanta revels in strong winds. She is at her best beating to windward in a force 6, and will consistently do that at 6 knots or more. It is far more effective to deal with a strong headwind under sail in a sailing boat. However powerful the engine, progress to windward will be slow wet and uncomfortable if you try to motor through it.
I know it works – but I wo