Downsize engines possible?

That would entail new engine beds, moving all the running gear, likely building in a tunnel or significant keel work. Likely change a lot of the characteristics of the boat to make it work. Then add in a thruster install and new twins are going to start looking like a bargain.

All that and I'm guessing the age of the running main is the same as the dead one. Volvo like many of the European engine builders makes a good product, but as they age their parts cost goes up like rare collectibles. It doesn't take long buying scania, Volvo, or man parts for legacy engines can quickly make a repower look financially feasible.

 

Actually we don't know how old his engines are, there is a slight discrepancy in the description, 1990 there was no 220hp Volvo Penta diesel. Closest to that rating is the KD42 series, but that started in 1991 and has 230hp.
For most 90's Volvo products parts are still plentiful in Europe, that shouldn't be a problem. Prices are what they are, labor is going to cost more then the parts, even for this wet sleeve engines.

 

The cost would depend on whether the OP is doing the work or hiring it out. There would not be any need for new engine beds, he would use the two inner ones.