[Minnewaska]

I went around the coupler with a 0.004" feeler gauge

I may not be following your procedure. That's the generally allowable difference permitted between two opposing positions on the shaft, after you've hand tightened the coupler against a larger feeler, but not necessarily the gap itself.

To answer your question, I doubt the PSS tension is bending the shaft, but that's not to say your shaft isn't bent. I had a prop guy tell me once that he's never removed an old shaft, under 2" in diameter, that wasn't slightly bent.

Did you put new cutlass bearings in? They might bind more than you remember, especially if the shaft is out of plumb.

 

[Minnewaska]

I wonder if I need to unfasten the steel collar the holds back the PSS bellows, and then do shaft alignment before compressing the bellows and fastening the collar again.

Yes, I think you do. You also need to loosen the coupling to the transmission. You said it looked visually aligned, but the tolerance is usually 4 thousandths and you can't see that. The bolts or studs should smoothly slide in the coupling, or the gross height alignment is off. Without any pressure from the PSS bellow, you put a larger feeler gauge between the coupling halves, say something around 0.02. Once lined up, you just finger tighten all the nuts and bolts around the coupling, just until they meet. No torque whatsoever. Now pull out your feeler gauge and test the other four quadrants. None should be more than 0.004 diff from the original spot.

Once you tightened down the bolts, could have easily put some stress into the alignment. It seems nearly impossible to think that all four motor mount adjustments were perfectly reestablished for the new transmission offset, prior to dropping the engine back in.

Good luck with the alignment procedure. I think you have an easy fix here.

 

[Minnewaska]

It doesn't look like the grooves would have been from a loose PSS, or it would have been leaking everywhere. I'm guessing it's from whatever was installed prior.

Nevertheless, PSS sells a split safety ring that you can install behind the compression ring. I wouldn't go without.

p.s. you should not need to do anything more than twist the compression ring and work the bellows into compression. Something is also wrong there. You can't use grease, but I do think there is a hack with dish soap.

 

[Minnewaska]

The problem is that my bellows are quite old (10y+)

PSS says to replace the bellows (and other wear items) every 5 or 6 years, I believe. This is not a part you want to split, while in the water, and it sure sounds like yours could be old and getting brittle. The irregular surface could make it impossible to temporarily repair underway. It's a potential sink the boat failure, if it happens while you're not aboard.

By the way, the service kit is a big percent of the cost of a new unit, because most parts are tossed. Replacing everything with new is often the answer.