Don't give up the ship yet, man. My first RC, a Duratrax Evader, had...has a inboard steering linkage system that's more complex than what might be necessary. Maybe it's the same on your MT. Are there adjustable linkages in there? Can you post some more pics?
On the servo, are you saying the output shaft on the stock servo is tapered?? I've never seen nor heard of such an animal. It'd be highly unusual. With the new servo, you used the supplied servo horn/arm?