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That chafing on the quill is super common, as in "everyone." The replacement part is not expensive. I think it's called the front bearing cover. Just get a new one and a tube of the special orange sealant. Clean and degrease thoroughly before installing. Even if the transmission has been drained, fluid will continue to ooze out from the mid-shaft bearing so, keep that in mind before removing the old one.
Good luck!
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