Acadwheel, I usually just polish the mainshaft before installing it and everything goes together fine. The reason I don't want to sand the shaft is I want to maintain the clearances between the shaft and lower bearing.

Also there's no way to tell if the Li-Po is still good, but it's definitely damaged. It may fail slowly and just puff and swell or it may fail quickly and combust. Usually they only catch fire when they are shorted, but I'm not sure how a physically damaged cell affects the equation. It also brings up another point. I almost never fly without the canopy on the heli to protect the Li-Po.