You cannot repair it. Not cost-effectively anyway. Your best most economical route is to replace the hydro with a good used unit. They usually sell for around $125.
It is caused by driveshaft misalignment either because it is bent, or because the centering bearing went out. The off-center load causes the shaft to wear a flat spot on it because that is where the most pressure is on the shaft. I'm not sure if that makes any sense.... but it's the best description I can do at the moment.
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