Hi Kelsey and grumpy, Have a look at the cutter clutch (engine shaft) pulley illustration (increasing magnification).. Component number 147 and I think you'll find that the large "hex nut" is, in fact, an integral fact part of the pulley. It is there to assist in pulley removal...you can get a spanner on the 2 long flats to hold it whilst undoing the nut. It well may be the same for the cylinder reel pulley...
Kelsey, are there 2 long flats on the lower pulley?
IMO, I think the probs may well lie in the cylinder reel bearings being shot....possibly the engine shaft bearing may need replacing as well. This would account for the uneven wear on the reel and not lining up on the bed-knife. This would make adjustment of the reel to bed-knife clearances impossible.
