[Arran]

That bushing, as you call it, actually acts like a thrust bearing between the dial drive and the bracket. The spring is there to maintain pressure between the thrust bearing, the edge of the dial, and that T shaped sleeve on the other side, the pressure it applies is horizontal so I don't think it caused the shaft to wear as it did. I don't know what to suggest as a means of dealing with the worn shaft, welding it and then machining it down in a lathe would be the best method, unless you could fit a sleeve over it. If these were designed properly they would have used a bronze or brass bushing for the shaft to rotate inside of rather then a thin edge of a sheet metal bracket, this was normal construction with tuning shafts in later sets.
Regards
Arran