I called the local stealer here in town and grilled em pretty hard on whether they had a mechanic that is proficient on the Valk. Supposedly their lead mechanic used to ride a Valk and is good at working on em. I've met him before, when taking the bike in for state inspections there. He's been there for yrs. and is a cranky old fart. But what I found odd was when I was talking price, they said it was 80 bucks each tire to mount and balance. So I asked if that was on or off the bike, knowing the answer and he surprised me and said it was the same whether they removed tire and put it back on or I just brought the tire in??????????? I just hate using the stealer, I'm usually always on the road working and wife and I stay in our travel trailer. So I can't work on the bike on the road. I had a rear tire swapped out that I had on hand, by a stealer and I'm having a wierd noise if I'm in a corner and hit a dip. When I first picked it up the rear tire wouldn't even hardly spin. Took it back and he said he had accidentally put the wrong spacer in.

So I'm kinda thinking the final drive might have some problems. But I do have a spare one, from the trike conversion with less than a thousand miles on it. There isn't any difference in a 2001 I/S rear end versus the 2000 std? I know the disc is different on some on the front, are they the same on the rear? I really enjoy working on the bikes, but am rarely home where I can. Hence the reason I haven't swapped out a rear tire yet.
There's probably some other motorcycle shops locally who can mount the tires far less expensively. $80 off the bike sounds high. And since they didn't put the thing together correctly after a previous tire change, I'd worry about them doing it right.
The previous work on your rear end sounds like it might have damaged the bearings (still trying to figure out how they put the wrong spacer in - I'd think that impossible unless they put in a spacer from a different model). I would also worry about the splines - did they loosen the 4 nuts that mount the pumpkin to the swing arm, torque the axle and then torque the 4 nuts? My bet is that they never touched those 4 nuts.
The bearings are in the wheel so changing out the rear drive won't make any difference for the bearings. The pumpkin itself is the same between the I/S and the standard.
That's my 2 cents but others are far more knowledgeable than me.