AS far as I know the propeller and shaft are functional and seem in decent condition. Is there any reason to do further work while the nuts are off and it's out of the water? Looking for ideas.
Well, I see i came into the conversation late. I hadn't seen the subsequent posts that you had removed the nuts when I posted my first comment...
So given where you are at, definitely get new nuts.
I'd inspect the whole system.
Look for wear in the cutlass bearing. Pull the flange off the engine and pull the shaft out far enough to inspect in all locations that you can't see when it's installed. Look for any scoring of the shaft where it goes through the hull and Cutlass bearing. Inspect the PSS bellows and the sealing surface. Get your prop inspected.
If everything looks good - reassemble. If any component looks questionable, replace.
If you have shaft scoring, you should just replace all the above (possibly not the prop)..
dj