Never heard of that much movement, but somebody else might have.
The "thump" when you let off the gas sounds like it's something with the kush drive's rubber dampers. But worn rubber dampers wouldn't cause that much movement you described with the wheel off the ground. Was tempted to say it's the propellor shaft or U-joint but since the rear axle pegs the left side of the rear wheel in place, I dunno. Swingarm bearings? Did you torque the rear axle to specs?
