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Tom -
You might get lucky and find a good steel drum to replace the one that I agree "has to go", but it is doubtful. Most used drums would be too thin to turn. Turning steel drums is tough, and you would be lucky to find a shop with the proper mandrel to do it.
The vendors sell cast iron replacements. I previously suggested Randy Gross as a source. I would not replace just one drum in cast iron with the other in steel.
In my previous post, I mentioned that if the drums were running loose, that the axle tapers, keyways etc could be messed up. I think that's what you are seeing. I think that with some blue dye and patience, you could clean up the axle taper to get a good fit on the hub.
As the axle taper is reworked, you may find that the drum now hits the backing plate. That's the only reason I would ever use axle shims - it will move the hub back away from the backing plate.
The threads on the end of the axle also look stripped. If you don't have good nut engagement on the axle threads, you will never be able to torque the axle nuts properly. Be certain to use new HARDENED axle nuts. If necessary, the axle threads can be repaired by essentially replacing the original 5/8-16 nuts with 9/16-16 (and a slight reduction of torque with the new nuts) after filing down the original threads. There is a very good youtube video showing this being done on the car, and I've done it on my own vehicle. Its a safe fix that should last until a rear-end rebuild is needed.
I'm sure you will also want to look at the condition of the service brakes, rollers, tracks, and emergency brake while you have it all apart.
GRutter