Steering Gear - 1938

[38Red]

Barners -
Excuse this as my first post (except that one question about an apparently fly-by-night lighting system that never materialized). I will try to post a proper "introduction" at a future time. I have been working on a "two-family" 1938 Pickup 81-C for the last couple of years. I have appreciated all the knowledge and resources gleaned from this site. In this case, I've read the searched the posts, and requested the 1974 article from Street Rodder but have not seen anything quite like the discovery in the pictures attached. It appears this is "by design" and not field engineering. Of course, it is leaking like a sieve. I am taking this to a local machine shop soon to see if they have ideas on minimizing the "gap". And have a feeling the "correct" solution is to remove and replace with the "6.5 inch tube" system in the article and forums. All that said, I was hopeful to glean some insight from the wealth of experience here - has anyone seen this? And is my assumption correct on remove/replace?
Thanks for any help/insights.