Canadian Valiant with Direct Drive Starter

So after figuring out my wiring issues with the HEI retrofit I set about setting the timing.
First thing was to determine if the harmonic balancer ring has slipped at all.
So I pulled the rad and fan blade for working space and put a wrench on the balancer to turn it over by hand and measure TDC by measuring piston travel.
Good news is there is minimal timing chain slack. Bad news is the starter bendix is engages and won't retract. There is no battery in the car so it must be a mechanical issue.
So I pulled the starter and noticed the bendix is out farther than I would anticipate. So far that it engages the flywheel all the time.
Looking at replacement units on Rockauto confirms that mine is not retracted the same. Am I correct in this assumption?
So the question is why and can I rebuild/repair it? I can't justify over $100 for it.

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