This is only on the starbord side. There appears to be a guide shim missing. The other side is fine and has the shim. It has .038" play side to side and has very minimal play diagionally. Of course I have the drive off already and it's hard to rock it right now. What do you think?

I have seen worse clean it up put new pad on and check for exsseive play in bell housing, you should be ok

The merc part number for the wear pad is 805261A 1.
List is $12.40

I'm having the same exact problem. Wear does this wear pad go? I didn't see any evidence of a wear pad on my drive.

In the bottom pic, you can see a little notch at the right edge of the scuff. It clips on there and there is another little hole to the left of that. It just snaps into place.