First, the bad news. Once the rebar starts to rust, the rust will continue to expand; I don't see a practical way to permanently halt that process. With the rebar "overhead" as a it is positioned, you can't even soak it in acid to attempt to get rid of the rust. I'm afraid that encapsulating it will not really prevent further deterioration. Also, the bulkiness of the rebar and inability to get to its upper / aft side where it touches the cuddy edge will mean that any treatment based on rust converter followed by encapsulation is likely to be doomed.
From a strength perspective, I think a hollow (or foam-filled) profile as deep as the cuddy lip and perhaps 2" wide might be strong enough, especially if you use biaxial or similar for the glass. Now it looks from the last photo as if the damage already extends to the exterior (there seem to be some vertical cracks in the aft face of the cuddy lid). That would argue for adding some laminate there as well.
The big question would be the best approach for removal and restoration of the cuddy edge.
You could remove the hardware, fill all holes and cracks to get the smooth surface on the outside, then coat in several layers of release agent and lay up a mold of the cuddy edge, say 4" wide. You could then, at your leisure, lay up a new cuddy edge that uses a hollow foam profile instead of the rebar, and once it has set up, you could cut out the entire old cuddy edge, and glue your new piece in its place. When you lay up the new piece, you can give it a "lip" that covers the connection from underneath.
This technique would require the least effort in removal (just cut out one large piece) and any layup is against a mold (or plug, for creating the mold). You would be doing the layup twice (you'd not use epoxy for the mold, but cheaper polyester and you could use glass mat for the mold).
All alternates require you to somehow get the rebar out without damaging the cuddy lip further. If something like a Dremel or a Fein multimaster allows you to cut cleanly between rebar and deck, then you can contemplate going that route.
Assuming you removed the entire rebar, you'd probably want to turn the boat upside down and suspend it on something so it's high enough for you to work underneath. You could lay up a foam-filled hollow shape in the "L" formed by the cuddy lip. The strength comes from there being two layers of glass when you are done that are 1" or so separated. One layer is the deck, and the other is the new layer on top of the foam. Together they form a beam (with the foam, the vertical face of the lip and the forward face all transmitting the shear forces). That kind of structure will be way stiffer than if you simply added a layer or two of glass where the rebar was.
Because of the cracks in the exterior aft face of the lip you need to either put some glass on the inside, or add some on the outside (which would require that you paint that area later and the repair may be visible (but it's easier to do; you could even run it a bit over the top edge to add a bit of strength there.
Final alternative would be to not worry about hiding your repair and simply lay up the reinforcements on the top of the cuddy crown (with a final layer of glass (or two) that wraps all the way around the lip to help cover the cracks and restore strength to that lip). In essence, such a repair would be similar to how the DSII cuddy is molded. It's crown extends upwards a bit, probably to gain extra strength?
Instead of a narrow rise right at the lip (as the DS2's have) you may want to make a strip that forms more of a 2-3" wide platform so you can re-mount your cleats there.
Instead of working with foam, you could use a strip of 1/4" or 1/2" plywood. That would allow you to drill out ahead of time the areas where you later want to mount hardware and to fill those with some epoxy/fiber mix or thickened epoxy before you cover with the outer layer of glass fabric. That way, when you drill the mounting holes, you don't drill into the plywood.
The plywood should still bend easily and you can glue it in place first and then laminate around it.
Here's a crude drawing.
![CuddyTop.JPG](./download/file.php?id=1013&sid=4c6132336214def240b482086c0844d6)
- Repair option, outside
- CuddyTop.JPG (10.89 KiB) Viewed 17080 times
The last option would seem the easiest to build, but you will need to then paint it (to protect the epoxy from UV) and it will be a visible change. However, as the DS2's have that raised ridge there, your repair wouldn't be totally unlike anything found on some DaySailers.
Note that the DS class rules say: "No changes are permitted that modify the exterior lines of the hull, deck, or cuddy." If you are racing, you might need to get a waiver. Given that the DS2 has a raised ridge in that location, it would be tough to argue that making an exterior repair gives your boat a competitive edge. But, if that applies to you, I would contact the class measurer first.