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Yes, depending on the usage, spline wear is not uncommon. I get so frustrated when I see this critical procedure overlooked by so many techs. The oring needs to be in place and the side of the splines must be generously coated with the OMC moly lube. The 5-8hp models seem prone to this disaster also, even with all the various changes in an attempt to protect the splines…The beauty of these engines is that it is so easy to remove the gearcase yearly (no shift rod connector) and relube the splines. This issue is even more severe in salt water. The gearcase needs to come off on all outboards at least every other year to clean/relube the splines and do the water pump. You don’t want to witness the carnage of sawing a V6 apart in order to remove the gearcase.
Oftentimes I will use a spare driveshaft sprayed with WD40 (unless it pulls out of the gearcase easily) to work in and out of the crank splines in an attempt to clean out some of the rust/crud that is building up…Then I lube those driveshaft splines and do it again before actually reinstalling the gearcase.
I haven’t seen a way of saving the crankshaft on these engines…Your 4hp does not have a lower seal, but the crank has a little slot that helps lube/protect the lower journal and bushing. Cutting a slot in the crankshaft defeats this function. I don’t think the 3 and 4hp cranks were the same, so the crank from the 64 3hp won’t help. I’m assuming you have already bought this engine, so you will need to look for a decent affordable used crank/powerhead. I’m sure you will inspect the splines closely, measure the rod journals also. These little engines had a habit of pitching the rods, don’t be fooled by journals that have been “cleaned up” with crocus/emery cloth. The driveshaft will need to be replaced also.
The 1976 was the first OMC to have the oring positioned in the crankshaft. Good and bad to this design. Seems like the oring is less likely to come out of the crank groove than it is to be pushed out of the driveshaft groove during installation. But, the powerhead has to come off to inspect or replace the orings positioned in the crank….