Well thanks to you all, I worked on the tractor as the snow was falling. I put in a new zerk, tested for slop in the shaft as Ol'George suggested and it appears the needle bearings are good. I reckon the reason why the left hand zerk was ground out was the chain was too loose which let the shaft slide over even more thus rubbing on it. Tightening the chain tightened up the entire bracket and it worked like a top. Graphite paint really helped, but we had about 15 inches of wet heavy snow and I had to blow in layers and even then the thrower kept clogging up and making these packed tubes of snow.
here's a link to a video at the top of my long curvy steep driveway.
Thanks all !
http://www.youtube.com/watch?v=EK2Lh8TjodI
Carl