Well, that's certainly good news. If it runs fine then stick with it. As long as nothing is bent you should be ok. Probably had a little damage to bearings and possibly rings/walls but run it till you need a new one or a rebuild.
Is the sterndrive unit a Volvo? If I remember correctly they had a bulletin out about flapper valve failures and had some sort of fix. I'm not a sterndrive expert but I do remember that much.
