Is my drive shaft too short?

Yup.... I did not do it, but the last owner was racing it at the track back in 1974 and probably had the shaft in and out a few times. One of those times he must of snag the edge of the seal and knocked the spring out of it. That spring steel is very hard material and it sure did a job on the slip yoke.
I don't know if it would have helped in your situation, but I usually pack seal springs like that in with an appropriate grease