personally rather have auger bit come off from the gear box. vs the PTO shaft coming un done on me and flopping around and hitting me.
shear bolt should be sized to what ever is weaker (tractor or implement) and in majority of cases, you want to protect tractor first, and in that, sized to the tractor HP at the PTO.
example 20HP at PTO of tractor, with a PHD with gear box rated for max 50HP. tractor is lower number so size to that.
example someone with a CAT2 hitch (big old 60HP at PTO shaft), and using a PHD with a gear box rated for max 45HP. gear box on PHD is lower number and shear bolt is sized to that.
google "shear bolt strength chart" should bring back websites to double check shear bolt sizing.
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the very bottom "point" on the auger. looks abit worn down.
and what really looks worn down is the "meh don't know what to call them" the teeth on the wider outer edge.
while the point ya want sharp, i can get held up easily with sharp point, and dull teeth on the wider outer edges. in dry compacted dirt (more so dry clay). a dull point, and sharp outer teeth, more likely to keep ya going. having both sharp ya is a good thing. but if cash is tight would choose the wider outer edge teeth first.
augar bits are based on output shaft size of the gear box. you may end finding a "bushing" or like on the auger shaft and gear box shaft. no real biggy there, just grab diameter of the PTO shaft, and auger shaft, and you should find what ever ya need. though i doubt ya going to need any extensions or like. only thing ya might need is a new or sharped up end bit, and/or wider outer edge teeth. unbolt them and take with ya to local ag store or tractor dealer and they should be able to set ya up with something.
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double check PTO shaft length. it maybe to short (raising the PHD up), or it may be to long (when it is going down into the ground) make sure pto shaft does not bottom out on itself.
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looks like it has been seating for some time, grease up the U joints, and double check gear oil in the gear box for it.
ya most likely going to need to pull pto shaft apart or almost apart, and grease it down (grease it then wipe rag down it) and slide it back together. and then attach to tractor and raise it up/down a few times and see if you need to re-grease the PTO shaft. the pto shaft may want to stick on ya. until ya get some the rust worn down and the grease worked in. you may have to come up with an invented idea of how to pull PTO shaft apart if it is rusted together.
--for me, it took a couple hours running PHD (digging holes), and greasing the PTO shaft each time, before the PTO shaft started sliding smoothly vs sticking and wanting to jamb up on me. once the PTO shaft started to slide easily, a lot of the "vibration" went away from the PTO shaft as i used it. but before that it would vibrate and wobble like a guitar string.