I second trying to straighten the pulley, not the shaft. The deck on my 1862 had a similar bend in a pulley, it was slightly deeper but didn't extend around the pulley as far as yours. I was able to get it pretty close with some vice grips and a little tapping with a hammer and a backing block. If you make any rough spots on the tapered portion of the pulley during the straightening process do your best to get them as smooth as possible, usually a little file work and some fine sandpaper will do the trick.
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