Mercruiser Intermediate Shift bushing

[Liam]

I have traced a stiff shift issue to the Intermediate shift shaft bushing in my Merc R drive. I removed the intermediate shaft which was binding to find what appears to be a sleeve within a bushing set up.
The shaft looks fine, as far as I can tell from looking around at the parts listings there should only be one bushing that is pressed into the upper housing, that bushing does not show any obvious signs of wear and the specs I saw state 0.040 of clearance between it and the shaft.
I am confused as to where the second wafer thin(and missing pieces due to corrosion) sleeve came from? Maybe someone added it? Or the bushing came apart?
0.040 seems like a lot, I have not yet measured the shaft or pressed in bushing but it looks bigger than 0.040 difference. With the heavily corroded additional sleeve added there is no clearance at all?
Thanks for any help with this, Sterndrives are a whole new experience to me.