I originally thought that it might be a flattened out sincro, but I think prism nailed it. It DOES look like the remnants of a toasted bearing. Check the counter shaft. On the counter shaft there is a part of the shaft that acts like an inner reace on a bearing, and it can sometimes get chunked up, and ruin the whole counter shaft. Other than that, prietty much the whole tranny is re-buildable. I just tore through my new doner tranny for my 2x-4x conversion, and realized that I needed new bearings in it. I called MC, and asked them how much a master HD rebuild kit would be minus sincros (sp?), and was quoted a price of $208. Since my sincros are in decent shape, I will probably go this route.