Once again, thanks to everyone for the expert advice and help, and taking the time to give it. Stephen, I have the service manual and parts book, and looking at your figure, I see what you mean by the carrier bearings likely being worn, or worn out. The machine is a 5U, SN: 11169.
This machine has been a bit of a money pit, much as I love it. The paperwork that came with showed various people working on it over the years. My guess it was a contractor's machine originally, that was fairly well cared for. At some point, someone worked over the engine converting it to electric start with glow plugs. The machine was also repainted, I'm guessing at the same time (unfortunately in the new cat ugly yellow). After that at some point it went through several private owners. When I bought it, the PO had put in all new steering clutches, but the tracks were shot. Over the last year or two, I kept "upgrading" the machine with usable used tracks and rollers, new main clutch. I had the engine gone through with all the fuel system /injectors cleaned up, new radiator core, etc. When I buy an old machine, I usually just keep working at it every year and slowly bring it back to good mechanical condition (also spreading out the financial hurt). I just used it last week to clear out some light brush in the orchard, and the thing runs like a top - no smoke, no oil burning, lots of power. It purrs like a kitten, and it really a nice machine in many ways.
The steering clutch lever movement has been there since I got it. My guess is the machine has seen a lot of hours (although only 3500 hrs on the hourmeter), had the engine rebuilt at some point, and continued on until the undercarriage was shot. So the ring gear carrier bearings didn't just start to fail. Somebody must have used this machine for a long time with them already worn. My point is I'm a little worried that they are just one worn out component in the rear end, and that it should be totally rebuilt, as the gears and other bearings may be shot. I won't know until I look around a bit inside. Again, I only use the machine probably 20-30 hrs a year for fairly light work. I may just use it as little as I can this summer and not stress it heavily, then see what to do next winter.
I have in the back of my head that it might be better to try to locate the rear end off a salvage machine or find something with no motor. It would be fairly easy to swap the entire front end of my machine where I've put all the time and money into, and just replace the rear end. My tracks, rollers, sprocket are good, and the steering clutches all new. It seems like if my rear end has enough hours to wear out the carrier bearings (or if they didn't pay attention to the lube oil), which I don't think is a common failure, a lot of other components must be worn out as well. The transmission does seem fine, but who knows if something is just short of failing. The good news is, if I go that route, that will be about the last components in the machine that haven't been replaced or renewed in some way. This is an expensive way to build a new machine, but like Johnny Cash sang, I'm doing it one piece at a time.