Repair options Please List

You could argue with the word hydroscopic! LOL

Curios to know how gelcoat stacks up in hygroscopy compared to other layup resins.

Jeff, please don't take offense to this "disussion". It's not meant as argument. Your experience is very much welcomed.

Gel is poly resin and every bit as hydroscopic as the glass in the hull. Epoxy resin is not hydroscopic and can be left bare without any issues, save for the fact that it's not uv resistant. It is otherwise a superior repair from a structural perspective. Cosmetic is another issue.

I would atleast brush or roll some on, to seal it all up a bit better. OCD I never leave raw glass filler resin. I even paint new foam when poured into green hull.

Jeff,
Welcome to CCfan. Are you a CC owner? If so, we'd love to see pictures.

I like your repair method with one exception. Your process makes no provisions for strut/shaft/log alignment!   

Ok guys i ground all the loose stuff out and sanded the area. Waiting on my Fairing material to come in to start my buildup and sand it back down.

Sleppyone,
If it were mine I would grind all the loose stuff out of the cavity with a air grinder that looks like this.


and a bit that looks like this:


You can just use a basic 4 or 4 1/2 side grinder with a flapdisk on the hull areas outside of the pocket.

Then I would inspect, just like everyone else has suggested, for damage beyond the gelcoat. If no further damage I would just go with the Thixo. It is a great product that will do what you need in this instance. When you apply the Thixo you will need to smooth it out with a applicator/ squeegee. Jamestown sells the 3m brand which is pretty soft and flexible, but if it is too big to maneuver in the recess you can cut it down to size with a utility knife. After the Thixo cures for 24 hours and you do the final sanding /shaping you can add more if needed to get the profile you need. The trick is going to be getting the pocket uniform so that you will be able to get the shaft alignment back where you need it.
If mine, I would not worry about cosmetics until Fall, if ever. You should also take a look at Pete's alignment video and Eric's step by step.

What caused the damage?

I would remove anything that is loose or has voids in the glass just below it. If there aren't any signs of damage extending deeper into the hull (cracks, voids, delamination, etc), I'd build it back up with thickened epoxy resin. Maybe tint it white if you're fancy. You can always follow by a conversion coat and gel if cosmetics are a concern. It will probably take a few rounds of filling and grinding/sanding to get the shape right.

oof, if it were mine i would not just patch it i would grind back anything that is loose first, including the gel.
I am not a fiberglass expert so take this advice at own risk.
Then i would cut some glass cloth to lay in there where needed. Lay the needed layers and set it up you will probably need to use west systems 404 or 403 additive.
to get the shape back, an easy way is either make a mold of the area with foam and fill all the areas needed and press the mold right up in there. and let it set up.
when its all set up you can just spray the foam with acetone and it goes away leaving the west system in the desired shape.
you could also use the strut as a mold to keep things flat just make sure to spray it with pam first.
I use the foam method lot when making forms and molds, its pretty easy and west system is the only glass that you can do that with i believe.
-Tony