Hey folks, so I have a decision to make and I was hoping to get some feedback before I make my decision. Ok so bear with me, i got a bit of a surprise yesterday. So I have a 2007 zx14 almost 70k miles and salvage title. I picked it up for $2.5k a year ago. Well I thought i blew the transmission up, nasty grinding sound shifting out of first gear then by the time i got it home second gear was grinding too and the rest of the gears no issues. So this sounds like classic transmission problems. I stoped riding the bike immediately, bought a used transmission for $350 and began to tear the old trans out. Well once i got everything appart i discovered that a bolt head had sheared off and was stuck to my magnetic oil drain plug, it wasnt there when I drain the oil at the beginning of this job but it was there once I got everything pulled apart. Here is where the bolt broke off from.
Ok so the transmission i pulled out of the bike doesn't look too bad in my opinion and I think the grinding sound I was hearing was this broken bolt grinding up my transmission. So my question is after examining the condition of the transmission I removed, which prev. owner said the transmission had been replaced on this bike so it might not even be that old. Here are pics of the trans. i pulled out.
(More photos below)
Should i put the new trans. that i bought in the bike or should I put the old transmission back in and go get my $350 back. Now I'm sure most of you guys would be thinking just put the new one in you already have it apart, its cheap insurance. But here's the other part of the story. The past couple years haven't been very good for me (as is the case for everyone) but I was getting this bike fixed to sell so I can make rent for next month. I don't particularly want to sell the bike but i need some quick cash cuz i have like 1 more mont of rent in my bank account and then im f@%&#d. An extra 350 could buy me enough time to make some money and avoid selling my bike. Whats your guys thoughts?

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Here is a better photo, the part that im holding is from the new trans. You can see a small groove work in 2 of the gears from the old trans. and that is the extent of the visible damage that i have been able to find. Oil came out clean, overall far less destruction than i was expecting to find.
Another pic of damage on old trans.

Look at the dogs and see if they are worn. Those are the slots both protruding out, and the cutouts for the dogs to engage. The next is the forks and are they scored the large C and around that long C curve. If not that worn, then return the trans and get that money back for rent.

These parts are case hardened. Basically if the hardening is damaged it's possible and maybe probable rapid wear can occur. I had a motorcycle which started popping out of 2nd gear. It was the dogs which were damaged, I assume, by me trying to shift without using the clutch, or maybe it was that proverbially pushed it over the edge.

But that's how I learned about case hardening, and what that meant to a motorcycle trans. (Most?) Cams are hardened in a similar manner, and exhibit that same sort of wear scenario, if the hardened surface is damaged it's a short matter of time the lobe is wiped.

I would inspect the parts and replace any that show signs of damage, chips, or scarring. And I would particularly inspect the dgos and lands as Hub suggest, if those are buggered up at all definitely replace. If you had a hardness tester, you could possibly test any suspect areas to verify if the hardening is worn through, but I would probably replace regardless.