Thanks for the ideas, there's no reason I can't work the "slab" of aluminum into a foil, I think it would not be hard at all. Yes, the idea is that the lower half of the rudder assembly will pivot up and aft. Since my keel retracts, it only makes sense the rudder would too.
I like the teflon shim idea, I wondered if the marine grease I put in my wheel bearings on the trailer would work but it would be nice to put in something that wont wash away. If there is some corrosion over time, I may have to rebuild, but maybe I'll be rich by then.
mitiempo, I have completely restored (rebuilt) this old boat (separated deck from hull, new paint, fixed gaping hole in hull, new interior, new rigging, new sails, -the whole nine yards (or 21 feet as it were)). One of my efforts was to rid her of wood that would need to be varnished ( I like the look of the wood, but not the maintenance). I've built cabin hatch sliders, companion way doors, and tiller out of aluminum so far. Its all worked out quite well. I'm not talking about scab and gob type work, but real nice looking parts. I think its a viable option. Anyway, its worked for me!
Here's another option I discovered today in the shop. I found some white pine that is very nice and in 3/4 x 1 inch slabs. Would it be better to use a couple of layers of that instead of the aluminum? Should it be painted, varnished, or glassed over if I do use it?