You probably did no damage at all to the cutless bearing. When turned when dry its normal for a cutless to squeek. It takes many minutes to heat up the bearing surface with a dry shaft to do any harm.
Proper clearance (assuming precise shaft/engine alignment) for an (installed) cutless is somewhere near 0,003-0,005" per inch of shaft diameter ...... something that you''re not going to feel by shaking and pulling on a propshaft.
Vibration in a (warmed up) A4 @ high rpm no load idle is probably due to a dirty/gummed carburator or different compression values between the cylinders. You might want to do a cursory compression check to verify that exhaust
valves are not ''hanging-up'', possibly a head gasket that is just starting to ''blow'' or piston rings that are partly sticking in their grooves. I''d run the engine moderately hard for quite a few hours before making any decision because if the engine has set idle for a long time, it will take a while for the internals to ''repolish'' themselves from the normal rust ''bloom'' that forms (if the engine wasnt properly fogged when shut down and stored).
The carburator (emulsion tube) is very sensative to gum formation from old stale fuel
. If the tube is gummed up or has the teensiest bit of dirt on it the engine will run rough. If the carb doesnt have an adjustable main jet, consider adding one.
Go to www.moyermarine.com and get yourself Don Moyer''s A4 maintenance manual - best investment you can make on an old A4. Don is the world''s "authority" on A4s. Most ''yard'' mechanics have long forgotten how to ''peak'' this engine and will replace-everything-under-the-sun and cost you $$$$ with little result. Get Don Moyers book and easily become your own A4 mechanic. These old engine harldy ever wear out, they just rot away from the inside, consider to add freshwater cooling to preserve the life.