Well after a few months off I finally started back on the balsa core replacement. Both areas along side the cabin trunk were totally deteriorated and required new 3/8" balsa core. This was caused by water leaking in through the stanchion and eventually rotting out the core.  I cut the top skin because there is no access to work inside the cabin in these areas. Once the skin was removed I scraped out the the old balsa, sanded the inner skin and cleaned with acetone. Cut the new balsa to fit which is easy to do with a utility knife. Then I mixed epoxy about the consistency of catsup and spread it in the area that need the new balsa.  Installed the new balsa, coated the top with epoxy and reinstalled the top skin. FYI be sure to fill all the voids with epoxy so it's sealed well.  I put wax paper over the reinstalled top skin and weighed it down with 40 lb. bags of lime. You can use sand or whatever as long as it holds the skins in place.  Once the epoxy cured I sanded the skin aprox. 2" on either side to tie in the cut sections back to the deck. Cut the new fiberglass to and epoxy it in place. I haven't started sanding and finishing yet but I'm well on my way. I will post pictures tonight of the progress so far.  BTW I'm using Don Casey's Complete Illustrated Sailboat Maintenance Manual to do this work and it's extremely helpful. Would highly recommend this book if you don't already have it.
Alan in NC
1977 Dawson Ketch

Josh,
I found the deck was extremely springy on either side of the cabin where the stanchions attach. I originally found the issue when I sounded the deck with a plactic hammer.  There was a spinnaker pole deck fitting that was leaking as well as the stanchions. That caused the balsa core to rot out. When I opened up the deck there was basically balsa dust and some rotted balsa wood in a section approximately 6" wide by 3 feet long. I lost the pictures of the rotted core but I have pictures of the area that was repaired. I'll post tonight.
Alan in NC