Driver's Side transmision output bearing loose??

[speedysmurf]

About six months ago my wife pulled into the driveway and I noticed a small puddle of tranny fluid on the driveway under the driver side inner CV Joint. The Transmission seal had worked it's way loose allowing fluid to run out, We had been getting a vibration under acceleration so I decided to replace the cv joint and the output seal. But when I grabbed the inner CV Joint I noticed a bit of up and down play probably a good 1/8" or more. After I put the new axle and seal in the leak stopped but the vibration still existed.

Now for the fun part, 3 weeks ago the engine blew up completely, rod bearing or wrist pin on the #2 cyl, tried to shove the piston through the head and the piston lost the fight. I just got a used engine with 34k on it and pulled the old engine and tranny, and everything else in front of the windshield for that matter. While I have the Tranny out I want to fix anything before I put it back together. (the tranny had been replaced at some time due to the tell tale Junk yard blue paint pen writing)

So, Does anyone know wether that amount of play is normal or do I need to replace a bearing in there?? If so, How????