I opened the crankcase cover of my '04 GS500 to check something out, but noticed that the front sprocket seems to move a bit on the shaft. I'm worried that it may be vibrating and causing other problems.
There's a damaged area around the clutch cable assembly (see images below) which may be a result of a different problem in the past (it's a used bike).
Basically I'm wondering if it's normal to have the sprocket move as much (see video)!

Video (I hope it's clear enough...): http://www.youtube.com/watch?v=NZNbgaSGyKI





Thanks!

In your video, the free play of the CS sprocket is about the same as I remember on my '07 with under 4,000 miles on it, I suspect the damage on your release arm might be from a previously very worn out chain and sprocket...my best guess 

Does the current chain show any signs of rubbing on the clutch release arm?

That's not just sideplay of the sprocket the way I see it, that's mostly wobble and way too much.  Looks like the shaft and/or sprocket bore are worn excessively.  That's caused by running the bike with the rear wheel out of line. 

No mention of model year or milage on your GS.  The 94 and later GSs have a hub on the sprocket about 3/32" wide mounted inwards but the earlier models don't have the hub on the sprocket.  I ran the hubless sprockets on my 97 GS for about half the 80k miles I put on it with wheel properly aligned with no problem.  Even with the extra 3/32" of sideplay inwards.  Later when I ran a hubless sprocket on my 02 GS I ran it with the rear wheel  out of line over the winter after a late season tire change and the sprocket wobbled like yours afterwards.  Never had the sprocket or chain hit the clutch lever like that.  I lucked out on that one with the excess wear being in the sprocket bore and the shaft spline still OK.  I've put another 57K miles (94k total now) on the 02 GS since then and the spline is still OK.  It's a real problem if that spline on the shaft wears out, a major repair job.

Just have to remove the outer retaining ring and slip the sprocket off to see the shaft spline.  If spline is OK put a new front sprocket on asap and keep your rear wheel properly aligned.

Sorry, should've mentioned - it's an 04 model with 31k on it.

The chain looks fine. A mechanic looked at it recently and he made no comments that would suggest otherwise (he didn't open the crankcase cover).
Though I can imagine that the chain is harder to damage than that release arm.

I did remove the sprocket and noticed the shaft is fairly rusty. Not sure how that normal is. Should've taken pics of that as well - bike is away for the next few days (waiting for an oil seal at my parents' place to fix a leak).

Thanks for the input so far!

The more I look at that, the more it looks like it was done with a grinder, a chain would have gauled it up more?
In fact, check for a weld bead on the back side of that??

Stevo is right. The angle of the grinding is ransom and very sharp. Someone intentionally did that - maybe because the front sprocket and chain were out of alignment and were rubbing the clutch thingy.

Put in a new thingy thing along with new front sprocket (to be sure all is good) and be sure all is aligned.

Some rust on the spindle is normal. Grease the spindle and sprocket when you put a new one on.

Yeah...thingy that thingy! 

Thanks guys

Okay so now I'm paranoid about my wheels being out of alignment.  I took my own wheels off to have new tires put on. Put them back on myself. Used the notches on the rear swing arm and made sure they were even. (while adjusting chain tension)

Eyeballed it and it looks straight. No handling issues or wired sounds. Any more precise way to check?

I check alignment with a metal yardstick after first aligning the wheel with the swing arm marks.  I place the yardstick across the tire just below the chain with the extra length forward.  If the rear sprocket is aligned with the front sprocket the yardstick and chain will be parallel.  I've never bothered with the commonly used string method.

When aligning the wheel using the swing arm marks make sure both of the notched index plates are biased in the same direction or you can easily be a mark off.  Since the left side nut wants to turn the plate clockwise I bias it that way and turn the right side plate counterclockwise as I snug the nut down so that the freeplay in the plates is taken up by moving the bottoms of both forward.

Many ignore the swingarm marks and just do the string method of alignment.  Since I left it out of alignment once (at least:-) after a tire change I no longer change the wheel alignment adjustments when pulling a wheel for a tire change.  I leave them locked down.  I make chain adjustments by counting equal turns of the adjusters (usually half turns) and only reset the adjusters to align the wheel when putting on a new chain.

Thanks Jack. I'll be sure to try that.

A chain alignment tool is less than $20...

-Jessie