+1 teazer. Sounds like you have a newer roller bearing setup. Either way there should be zero play either laterally (i.e. as you describe) or axially ( i.e. swing arm has extra space between the two sides of the frame.) Since you are checking at the rear axle, sounds like you have the former. Seems like a lot of folks don't totally understand how the assembly is supposed to work, so for what it's worth, the most important thing to realize is that for the vast majority of bikes, the swing arm pivot bolt is drawn tight, clamping all the inner bearing components tightly between the two sides of the frame, and essentially becoming a solid frame component. The swingarm assembly "floats" on this, and how much lost motion exists depends on how closely it fits. Older bikes with plastic or bronze (etc.) bushings have the outer bushings pressed into the swingarm, and all the lateral "play" depends on how well these bushings fit on the inner bushings , usually hardened steel, clamped by the bolt. End play depends on getting the exact thickness of shimming as teazer mentioned. Roller setups are similar, but end play is sometimes controlled by the drive side bearing instead of shims. If nothing is actually damaged, as in the fit for either the outer or inner races, simply replacing the bearings should restore the assembly to new. Shimmed assemblies are another story. It is a cut-and-try process and you have to either have an assortment of shims or luck and sometimes quite a bit of perseverance to really get a close fit. Regardless, the important thing to realize is that the inner components do not spin on the swingarm bolt, but are clamped down and held fast so there is no motion between them. All the motion is between bushings or rolling elements, which restricts wear to the replaceable bushings or bearings. As long as this is the case, there should never be any wear on the swingarm, the frame or the pivot bolt, and the system should be infinitely renewable. I am assuming the "spacer" you describe is actually the inner race for the needle bearing. If so, likely you need to replace the bearings as a set to maintain the right fit. In any case, making one yourself seems like the hard way, as it will have to be frightfully hard (like the rest of the bearing) to not get instantly chewed by the needles!