I know how you feel, but it's not the end of the world. I found similar core damage on a 22' Seafarer I had before boat I have now. I thoroughly researched my choices and decided to do the rebuild myself. At that time prices I got regarding having it repaired were in the 5-6000 range, and that is why I decided to do it myself. I considered using a "pour type" transom core material, and to be honest if I had to do it over again I would use that. I didn't use it though, and completely rebuilt transom using a marine grade plywood and epoxy resin. It was a LOT of work, and not for everyone. I found a boatbuilding forum website that happened to have their supply store near me in Vero Beach, and they advised me how to go about repair/rebuild, and sell me supplies. I also documented the repairs on their website.
http://forums.bateau2.com/viewtopic.php?f=10&t=19949
If you look at the first 3 or 4 pages you can see that I took an inside the hull approach to the repair. Others remove the outer skin and do work from outside, but to me that isn't a good idea, but just my opinion. A third, and much, much easier approach is to remove top cap on transom, dig out bad wood core, and pour in epoxy/fiberglass core material. You can use crowbar like tools and even chainsaw. I used a chainsaw and it worked great. It's tough getting down to lower corners, but not impossible. Once core is removed and dried you pour in the core material. Once it sets up, it will be impervious to any further water and very strong. I researched this quite extensively, and although I read "rumors" of this porable material cracking, etc., I honestly could not find one verifiable case, or first experience of that happening. Like I said before, if I had to do it again, and unless I could find one problem with this method, it is what I would do. By the way, doing the transom myself, I spend right around $600 for material. Hope this helps you out some. Mike
P.S. One of the names of pourable transom material is Seacast, and I've heard there are several others.