Rob -
What a GREAT machine! Very nice indeed. I love those. I have a '76 in white - makes me want to get it out of storage.
I agree with Jason about the snubber. If the spring is not rusted underneath (even if it is a little bit) you can get just the snubber pad, OR you can buy a whole kit with a new spring. They are easy to install. The pad alone shouldn't cost more than a couple bucks.
Yours really is worn. If it gets much worse the spring will start rubbing on the tub ring, which if nothing else is really noisy and eventually damaging to the ring.
Gordon