Actually it is not too unusual to have some movement there. 1/8" might be more than normal, but the only thing that holds it in place are the two snap rings. Snap ring #3 in the parts diagram should be visible on the outside. It keeps the guide from sliding into the cylinder. #6 is on the inside. It keeps the guide from pulling out. The method for disassembly is to remove from loader and drain the oil out. Remove the outer snap ring#3. Then push the guide back into the cylinder far enough to expose snap ring #6. Remove that snap ring with a couple of picks or screwdrivers. Then you should be able to pull cylinder rod, guide and piston out of cylinder barrell. You might find the snap rings worn or even the guide could be worn and allowing the excess movement. Having said all that, i wouldn't worry about it if the external ring is in place and it isn't leaking. But, if it is really bothering you, go ahead and take it apart and see if anything is worn. I would order seal kits #25 and 26, and snap rings #3 and 6. before you start. Guide #8 is likely to be worn also. Good Luck!