The flywheel should be tapered and fit "square" / flat with no wobble.
Can you push the flywheel BACK AND FORTH, even a little, with a pry bar?
Was there any event (machine striking something, etc) just before issues arose?
And the block IS the bearing looking at the parts diagram.
Thinking about it, a worn block would allow the flywheel to have the above mentioned play.
For it to
wobble, it's either not seated, the crankshaft bent, etc..
.