Cutlass & Alignment question

Boat went through a gravel bar on the weekend and have been assessing the damage.
Prop is toast and the drive shaft has some scratches and gouges on it. Following the instructions in the Alignment 101 video the alignment appears good so I don't think the cutlass was bent.

When I was checking the alignment the driveshaft had free play in the log, is this normal or indicative of a worn cutlass bearing? I could easily move the driveshaft up/ down and left/ right to touch the sides of the log. When supported and coupler aligned it goes through the center of the log. There doesn't seem to be any play in the cutlass when I try to move it at the propeller end.

Measuring the driveshaft with a dial indicator shows 0.010 deflection between the strut and hull and 0.005 deflection behind the strut with the propeller off. Turning the drive shaft and watching the coupling doesn't show any wobble. Would it be best to test for vibration on the lake or change the driveshaft?

Thanks
Mark

The deflection is run out when turning the shaft.
As the boat is on the trailer I would turn the shaft 1/8 of a turn and take a measurement, turn 1/8 and take a measurement.....
When I tried to read it just turning there was too much movement between boat, trailer, etc