That part looks like a clutch key. See part #35 in the exploded diagram in this attached file. I bought the BK108 kit when I rebuilt my SM420. Bearings seemed good to me; made in Japan if I recall correctly.
You might want to look for a newer transmission. I don't think the brass synchroniser rings are available for the early ones - I was able to get the them for my 1967 transmission. Bonus was the 1967 transmission came with backup light switch.
