I went thru this with a Grady White, which commenly have transom rot.
The outer skin was cut off about 3/4" inside of the tansom side joint. The fiberglass was saved, the wood--tooth picks by now, was vacuumed out.
A hexcell foam/fiberglass mat laminate 3/4 thick (x2) was cut the same size of the transom, it was bent slightly and wet down with polyester resin. Then it was sprun inside of the outer flanges of the transom--second piece was done the same, and then saturated with polyseter. The old transom was pushed into place, and about 6 1/4 " holes drilled and waxed bolts were put in place. These were tightened, and clamps along the top. After this all went off, the bolts were removed, the outside was feathered, and strips of glass mat and roving were laid up to reinforce the perphery of the transom. The top of the transom was simeraly treated, so that over 1/4" of glass was built up and over the top of the transom. This was then sprayed with matching gel coat, and the motor, kicker bracket, tow eye etc put back in place with good bedding compound. You could not see any place where the repair was made. The transom is sound 10 years later, and since there is no more wood, it is lighter and better.
The sea cast and epoxy remidies may not remove all of the old wood. The Sea Cast is heavier. I have seen transoms which had "get rot" injected--and it was OK where the epoxy was placed, but rot continued to occur. 10 years ago this cost $1800 in Pensacola. Probably $2500 now.
Be sure that the shop has extensive experience doing this repair.
It can be a DIY, and pressure treated plywood, epoxy soaked and epoxy laminated can be used in a similar manor--with epoxy for the inner layers and then polyester for the final fairing and outer skin. I would want someone who was good at fairing and spraying to do the finish work.
I have seen other repairs done from the inside, with a similar technique. Considering the way the C Dory is built, I would prefer the exterior repair.
Incidently, does the transom flex when you put weight on the motor lower leg? This is a sure sign. Don't do a half way repair!
Good luck.