Re: What does this spring do?
That spring and clamp keep the steering shaft from pistoning up and down inside the steering sleeve. I think you can save things.
That spring can be cut shorter to give you a little more shaft.
I made a few changes to my steering column so I am familiar with what you are doing. However, I eliminated the 3 on the column linkages and shortened everything so my steering wheel would be closer to the dash.
It looks like you have enough shaft length to have a machine shop machine the end of the shaft to a DD shape. Then just bolt on the DD end of the U-joint. I bought one with a through bolt for added safety.
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