Well, that was definitely unexpected! Good catch though. Not entirely sure how it would, but with these hydro pumps being such a precision assembly I'm sure the out of place bearing affected it to the point where it wouldn't work.
I'm guessing that maybe the belt broke when that bearing came loose. Perhaps when it first loosened it sat crooked on the shaft and caused a temporary binding.
For kicks, I went and took a look at the splines on my old hydro pump, and they pretty much look exactly the same as yours do and work just fine. Guess that wasn't the problem after all.
IMG_20210218_191704.jpg IMG_20210218_191804.jpg
Good to see that it seems you've figured it out though!
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'70 107 with k301 engine swap
'71 106 with 38" deck
'70 147
R with factory replacement k321, 42" deck
'61 Original with 38" timed deck
'63 70 "pinkie"
1863 with 54" deck
'46 Farmall H, '50 Farmall Cub
105 x2 (parts)