The Rounding off of the splined main shaft did not happen over night, in fact I'm quite sure it would have taken years for that to happen, probably could have been spotted two years ago or longer.
Even a casual glance during routine maintenance would have turned this up early. Did you Ever change countershaft sprockets? Doing that simple job would allow you to see the wear up close ... not that there is really anything to be done ... except WELD the sprocket on the shaft .... which I have seen done!
Some new aftermarket sprockets now are using some magic super hardening process to allow long life. The problem is that the surfaces are SO HARD they destroy chains early and maybe even wear out your splines on the shaft. That's another reason I prefer OEM sprockets.
But your bike is a 1985. That's 25 years of use/abuse  I'd say you've done quite well. Sell that Old Boiler for parts (or set it ablaze) and buy a newer bike. Move on. Not worth splitting the cases (IMHO) unless you can perform all the work yourself.
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