Ben - " to deploy the engine, you rotate the motor 90 degrees using the strut, take out the plug in the hull, and then lower the engine until the plug around it's shaft mates with the hull."
Very interesting, I had no idea Hobie made anything like that. And the Hobies lines are very similar to my Hunter Legend 45 built in '86.
It appears to me that the water level is below the top of the plug, especially from looking at other pictures of the Hobies.
If the plug is thicker than the waterline to the bottom of the hull that would be very effective in keeping water out.
Talador