To close the loop on this, I examined the tail shaft on a blown engine I have kept for miscellaneous parts and trying out repair procedures on.
The tail shaft on that engine wiggled about the same as the one in the boat.
I concluded that is the normal amount of wiggle. I suppose they both could be bad too...
I finished the repair and cannot recommend the MMI Tech Video on rear seal replacement highly enough.
Transmission seems to work fine now - no leaks and much quieter with the new thrust bearing.
Regards,
Peter
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