Edin,
It looks like someone has removed the ball bearing for the layshaft at the housing end, and substituted a bronze insert (the item with the four small holes) in its place.
Not sure why; it could be they were too cheap to buy a replacement ball bearing, it was not obtainable, or the original ball bearing had spun in the housing, wearing the bore oversize.
In any event, the bush with the four small holes is a later repair. It should be removed and the condition of the bore in the housing investigated to see about reinstating a ball bearing. Also, you will want to check the journal on the layshaft, as if they have been running it directly in a bronze bush, it may have now worn under size and no longer be a light press fit in the ball bearing.
As the layshaft is running about 2/3rds engine speed all the time, and lubrication is heavy oil/thin grease, I do not think I would want to rely on a plain bearing for supporting the layshaft. You could use a needle bearing, but I doubt that the case hardening on the layshaft journal is sufficiently hard and deep enough, so you would still need to install an inner race on the shaft. I do not recall what size the ball bearings were, but I do not remember them being all that difficult to get.
-Doug
