93 zx7 bent output shaft, dealer wants $900 to fix it

I took my 7 down to the dealer so they could put a 520 conversion on my bike and when I went to pick it up the guy at the counter said there was a big problem. The mechanic kept tightening the chain and it would go loose again and after getting the rear wheel in the air with the front sprocket cover off, he could see the sprocket moving forward and backward. He told me the sprocket end of the output shaft is bent, and me knowing the history of the bike I think I know why. The engine had seized at some point, maybe throwing a chain and bending the shaft, and the guy I bought it from had replaced the engine at 23k. I didn't know about it and have been riding it like this for 3,500 miles with no problems, but with this new chain and me knowing about it I certainly can't ride it like this and feel comfortable.

Anyway, the bike is almost mint except for this. 26k, with 14k on the engine. New tires, new brakes, new chain(now), new front wheel bearing, new windscreen, polished frame, swingarm and wheels, all fairings in good shape. Is letting them put a new output shaft in for $700 labor + prolly $200 in parts worth it? I don't have enough knowledge of bikes to do this myself, even though I know I could probably do it with enough time and a service manual and save a ton of cash. I really love the bike, but I'm just not sure.

Thanks,

Bobby