Unfortunately, yes. The bearings wore a bit of a groove in it.

I stole some batteries from my kid's toy. Here's some better photos of it:

http://i103.photobucket.com/albums/m...r/P1030303.jpg
http://i103.photobucket.com/albums/m...r/P1030301.jpg

I am so upset right now. Mad at myself more than anything. I'm getting all these replacement parts and even a couple of tools and in the end, just buying a replacement transmission would probably have been easier.

I don't know what to do. It doesn't look like you can even replace just the input shaft. At least Google doesn't seem to think it's possible.