OK - I was kind of slow to get this job done but got there in the end (nearly) so reporting back.
The bearing housing was pretty easy to remove, exactly as described. I was a bit worried that perhaps the screws holding the housing to the hull would shear but everying was in good condition when I dismantled it. There was a white metal bearing, and when that was removed the housing was a bit of a strange size (about 33mm, at first I had guessed 1.25 inch but not quite). No chance to remove the white metal bearing except by melting it out. So I can't see any way this could have been done with the bearing housing still in place on the hull.
Next I had the housing machined out to 34mm and fitted a standard rubber cutless bearing and set screw. So all that remains to be done is put it back on the boat, and it should be good to go, and hopefully afloat again in a few weeks.