If the bearing on the worm shaft is missing balls, it's shot. It doesn't matter how well it spins. It's possible that the missing balls from the bearing could have caused some damage to the gears if they got into the wrong place at the wrong time in the gearbox. Look them over very closely. The worm shaft bearing is not a standard radial ball bearing. There are/were two types available from IH/CIH. One (ST225BT or ST225Y) appears similar to a standard ball bearing, the other (ST678) is a heavier multiple-piece bearing. Some may tell you that replacing the worm shaft bearing with a standard ball bearing will be fine, and for fartin' around fairgrounds and in parades, it'll probably do ok, but using the loader and carrying extra weight up front will stress that bearing even more.
The thrust bearing assembly on the vertical shaft can cause binding sensations, too, if it's worn out, pieces are missing/damaged, or is full of dried out grease. With as much play as you say you have, there may be an issue with this bearing.
If the woodruff key is on the vertical shaft behind the removable panel in the bottom of the grille, it is for an arm that was used for steerable cultivators.
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Today's Featured Article - A Lifetime of David Brown - by Samuel Kennedy. I was born in 1950 and reared on my family’s 100 acre farm. It was a fairly typical Northern Ireland farm where the main enterprise was dairying but some pigs, poultry and sheep were also kept. Potatoes were grown for sale and oats were grown to be used for cattle and horse feeding. Up to about 1958 the dairy cows were fed hay with some turnips and after that grass silage was the main winter feed. That same year was the last in which flax was grown on the farm. Flax provided the fibre which w
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