Mine always had a good deal of side-to-side slop or looseness or play, but shifted fine & tight - even after the transaxle rebuild, although that tightened it up some. New bushings will take away a bit more. That play helps the typical DD driver know when they're in neutral, & aids in shifting into the relatively widespread of the 914's tail & side shifter 901 tranny.
But I believe you need to have some play side-to-side in neutral, otherwise shifting into any gear will be much harder. IIRC the factory manual has the spec for the play, so if you don't have a hard copy of one, then by the DC at AutoAtlanta (which also has a bunch of other 914 docs scanned on it too, so it's much more than just the 8 volumes scanned), then have it handy on your shop laptop/desktop/pad or print out hard copies & put them in some nice maroon binders just like the factory ones (binders at Staples or Office Depot, etc.), then keep it handy to get your greasy fingers all over it just like the old school days!
You also may be able to tighten it up a bit at the tunnel's shifter linkage, if that wasn't done yet (check for excessive wear at the knuckle there too).
Good Luck!
Tom
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