stuffing box question

If the shaft is straight and still fits tight in the trans mount/coupler you can emery cloth the shaft smooth where the rope seal runs. The rope seal is very moldable and will seal just fine on the reduced surface shaft. A new shaft is ideal but the rope seal is the least of my concerns. If smooth even if pitted the rope seal should be able to get you under 15 drips per minute. Smooth it with something like 600 and finish with a 1500 grit where the rope seal rides. This is for the budget constricted, if you have room to do it right you will get the best results.
As you tighten the nut against the rope seal it will expand and the slightly smaller shaft is not an issue at all. The rope seal will make up the diameter difference.
Make sure it is aligned correctly and your strut/cutlass bearings are good. Good Luck

Photos coming when its completed. I dont want to jinx it.

Yeah, I think its new shaft time. Whats another $400 on a 21 year old boat. I'd hate to blow a $6000 rebuild on a $400 dollar part! Hahaha

I agree with not using a longer hose and the potential weakness of the shaft. Did the shop check the runout of the shaft (before and after machining)? If not, I'd wonder about the integrity of that "machine shop"!! It should not exceed .003" What was the RMS finish they machined to?

Get a NEW SHAFT!! Yes on the ARE shaft system!!

I would question the safety of a shaft with with a portion turned away without a repair, so I would say no to using a longer hose to move the packing gland up the shaft or to try to seal by messing with the packing.

If the machine shop did not do it for you, you might consider checking the rest of the shaft for true with a dial indicator (I think they are more likely to be out of true aft of the strut). If the shaft is out of the boat and you have a known true surface (a granite counter top for example), you can check true by rolling it like a pool cue. If the shaft is not true, no need to consider further, get a new one.

Another thing to consider is ease of installation of the double taper shaft; that as well as accounting for the cost of repair to the old shaft may make a new shaft worth it. If I recall, the ARE shaft from Discount Inboard Marine (Ski Dim) is about $400 shipped (sorry to mention the US price Graham; I hope that does not make the pain you feel finding/buying parts worse than it already is).

My poor 93 ski, which has been awaiting its engine rebuild for almost two years, had a seized drive shaft to the packing material in the stuffing box. The boat has been a salt water boat, never more, but the shaft was pretty corroded to the point where it would of never sealed. In my ignorance, I took the shaft down to the machine shop to have them turn it down slightly to remove the peaks and valleys of the corrosion.Now I have a drive shaft that has two diameters. Its still plenty thick for strength purposes, but I'm wondering if my next move would be better to lengthen the stuffing box hose part as there is room to do this; or pack it with thicker packing material. Or should I just bite the bullet and take it back to the machine shop and have them build the shaft back up with bronze. That sounds expensive. I hope this makes sense.