Be careful removing that chuck. It is easy to break a tooth off the back gear if you use that to lock the spindle while yanking on the chuck.
One way of removing a stuck chuck is to cut a piece of hardwood to fit on the bed and stick up enough to catch one of the chuck jaws as it is rotated in the reverse direction. Then open the belt guard, put the belt in the low speed direction and by yanking on the belt rotate the spindle in the reverse direction, rotate teh chuck briskly until the jaw hits the hardwood and jars the chuck loose. It's best to do this with the power unplugged while handling the belts of course. If you have a reversing switch, and get desperate, you could even set the jaw away from the wood block and start the motor up briefly to rotate the chuck under power until the jaw hits the wooden block. Again, be wary of doing this in backgear as the teeth are prone to flying off under abuse.
With .5mm (20 thou) movement in the spindle, you might, maybe, be able to eliminate it by removing shims. Mine had a bout 15 thou of shims in there when I got it. Some scraping of the bearing to fit the spindle may be required, using bearing blue and a curved half-round scraper. If you are lucky most of the wear will be in the top half of the bearing, due to belt tension direction and cutting force direction. It might be necessary to file or machine down the mating faces of the bearing cap and lower half if there are not enough shims to remove. You can't buy new bearings. Only the full hardened spindle and bronze bearings as a kit, and quite expensive. Or used spindle and bearings from eBay. (Possibly someone else's worn out junk!)
If you have access to a milling machine you could machine out the bearing housings and install tapered roller bearings. I think Alan Hearsum published an article in Model Engineer about this conversion some years back,
Edited By Hopper on 03/02/2017 23:13:49