Thanks for the replies everyone.
Dave, it has been a long time. I hope you are doing well. The gear is a decent second hand original one
I ended up going into the shed this morning and having another look with fresh eyes and a remeasure. The 1st motion shaft end has more of a protrusion than the standard one. I ended up assembling both of them in the box and sticking a feeler gauge between the 1st motion shaft bearing and the edge of the teeth on the layshaft. Doing the maths between the two measurements showed ~0.3mm of difference. even when eyed up on the bench, the difference was visible - this was also confirmed in the overall length.
Taking into account the fact that I was rebuilding the box, I elected to take ~0.25mm off the back of the thrust washer on the lathe as I figured a replacement thrust washer would be cheaper and easier to source than another new laygear if everything went downhill. With this I ended up with 0.003" of end float when assembled with the new gear and the mesh also looks closer to what I pulled out. Box turns smoothly in all gears.
I machined an arbor and then attached the thrust washer to it:
Thoughts / comments on this? I don't feel I have the skill or the equipment to do any kind of machining on the laygear itself. Should I find yet another laygear?