Hi Shannon,
Welcome to our wonderful Forum where we all learn something new everyday.
Well that is the sign of a well flogged out piece of key steel and as such you might have issues getting it back in where its supposed to be. As such I wouldn't reuse it and just replace it with a new piece which can be bought for around $5 to $6 through the online shop or if you have a mower shop near by you'll get one there. The Woodruf key (half moon shaped)is also showing signs of wear and I'd replace that one too while it's all apart. It's a small price to pay and not have bigger issues later on.
You might want to consider splitting the two clutch halves open and removing the thrust bearing inside and re-lubing it with new grease, as you might as well do it while you have the clutch assembly out, also inspect how much cork thickness is still there so as to avoid an issue that one of our other members had of no cork at all left. Greasing the bearing will quieten the machine down somewhat when it is running with the cutter clutch disengaged and all the pressure is on that thrust bearing. (same as having your foot on the clutch in a manual car)
Just before putting it all back together get a small file and chase out the keyway on the engines output shaft thus removing any of the proud burs that have been created by the key steel, this will ensure that it will all go together rather smoothly.
Also splitting the clutch apart and only installing the engine side first will allow you to adjust the key steel back and forth so that it's in exactly the correct position as it can slide in too far if it grabs onto the shaft when installing the clutch half. This is just a suggestion.
Let us know how you go and once again a huge welcome to the ODK
Cheers,
BB
