I have found that often, the 1/2 sphere bushings that chev uses as rocker arm pivots fit right onto the shift arms, and make fantastic bushings at the pivot points of shift linkage. check it out. a great use for old/worn pivot balls too.
Some shift linkages don't have any bushing in the area you squared off. Now what I can see is the shaft on the opposite side where the spring is isn't centered as it should be. That bushing is worn. Also the flat bar in the center of the shaft with the hole in it should take a nylon bushing. That's all I can see from here. :beer:
as mike said some use that bushing and some dont. if your rod doesnt fit in the bracket snugly as in the pic you need the oval bushing (2) required, one for each side if the trans bracket. while there replace the round nylon bushing that goes in the frame bracket as well to tighten the whole thing up