Time for new bearings?

no bearings there. the bearings are in the carrier between the chain and the brake rotor. looks like the splines were probably worn on the axle or hub so he wrapped it with some thick packing tape and hammered it on
 
you would have to pull the hub and look to see what's going on. just take the cotter pin out of the big center nut on the rim. then take that nut off. the whole hub will pull off with the tire. but you might have to take rim off the hub to be able to get to the nut to take it off. take a couple pix of the splines when you get it appart. you don't want the hub to wiggle around on the axle. should be a nice snug fit
 
Deff not bearings bud looking at the pic from my phone I would say the splines on the axle are shot when you take it apart inspect carefully you may need a new axle or you can weld it on but later down the road say you wanna run shee hubs for shee rims you will need to grind the weld off to replace the hub. will be watching this thread to help you as much as I can good luck
 
wow,so glad i have a spare axle,mine were lose like that, i torqued the axle nuts n she tightened right up.WELD IT UP lol.
Things wear with age,natur of the beast.