Same situation on my 36 (2002) Bill, but having said that, the chafe appears to be just in the plastic covering. Considering that my boat worked hard during its first nine years of life as a charter boat, and also that nothing was spent on it for most of that time, the extent of the chafe is not that bad. As you mentioned the chains with wires attached crossover in the lower part of the pedestal such that the chain coming down from the starboard side of the Whitlock spindle attaches to the port side of the steering quadrant and vice versa for the other chain, in order that the rudder turns in the correct same sense as the wheel. Where the wires cross, one is lead slightly forward while the other leads slightly aft thus making some attempt to minimise the the extent of the chafe. The question is am I worried about it enough to want to make changes? I have to say not really. I will keep an eye on things, but all the while there is no metal to metal contact I can live with it.