Well, there is nothing I hate more than being wrong and it looks like I am on this one. Overly optimistic is maybe the better way to put it.
Here's the whole story now.
1st, a schematic I drew of the seawater pump assembly:

The seawater pump assembly:

As the picture shows, the pulley is WAY too far away from the housing. It freely moved in and out by hand once I had it out of the boat. Sorry if this pic is upside down, but I've tried about 20 times now to correct it on photobucket and it won't work.

A closer look, you can see the tolerance ring (item #6, which I was calling the "snap ring") and the gold seal (item #7) on the shaft near the pulley. They should be tucked inside the housing. Same for one of the two seawater pump driveshaft bearings (item #5-all one piece) that you should NOT be able to see.
Finally decided to see if I could pull the entire driveshaft out of the pump housing by hand. As you can see, I was successful:

According to Paul at Blue Springs Marine in Blue Springs, MO, the driveshaft bearings are pressed into place on the driveshaft, and then the driveshaft is pressed inside of the housing so it was bad news that I could pull the entire thing out by hand. As you can see in the picture, the two bearings are supposed to be much closer together. The bearing furthest from the pulley should be closer to the bearing that is closer to the pulley. The bearing closest to the pulley is still in the correct place. If you look on the shaft, you can see the shiny marking where the bearing used to sit. You can't see it in the picture, but when we pressed on the bearing that moved with our fingers, corroded water came out of it. This bearing is supposed to stay dry, protected from the water by the Seal (item #4 in schematic). Obviously the seal failed.
Pump housing. Wishing I had more light when I took the pic, you can only barely see the marks where the bad bearing moved inside of the housing when I had my trouble on the water.

Unfortunately, merely replacing the driveshaft is not an option for 2 reasons:
1. BSM/Mercruiser only sells the entire seawater pump assembly as it is depicted in the schematic above. The assembly includes all parts shown, and they are not sold individually.
2. Even if I bought the driveshaft individually from somewhere like Mercruiserparts.com, it seems from looking at the pump housing that there is a significant chance that the inside of the housing has got enough variance in it now that it would be out of tolerance and potentially I would have the problem repeat itself down the line. If that were to happen, I'd be looking at replacing the driveshaft yet again as well as the pump housing. So, I'd essentially be risking the cost of the new driveshaft v. just replacing it all at once.
So, I'm pretty much faced with a replacement seawater pump housing assembly. According to Paul at BSM, the pulley can be removed/replaced with rental tools from O'Reilly or Napa so that is good to know. Surprisingly, Mercruiserparts.com lists this part for $456.00 plus shipping but BSM could get it for me here locally for $276.00. Not quite sure how to explain that one, but Paul at BSM called Merc for me with me standing right there and verified with them that we were looking at the right thing, and that it was the entire assembly for that price.
Confusing, but $200 less is something I will not argue with. Add to that the fact that the assembly comes with a new impeller. I had bought from BSM a new impeller by itself for about $40 and an impeller kit that had an impeller and some o-rings and stuff in it for $80 when I was planning on changing the impeller originally. Paul at BSM said I could bring that stuff back, so that $120 would make the repair cost $150-not nearly as bad as I originally thought if the seawater pump housing needed replacing after all.
Off to look for $150.....