Intersting you should ask... I just had to deal with exactly the same problem.
I chose to remove the prop and have it repaired. I had about 1/8" of movement at the blade tip.
It cost $100 plus shipping to have the blade shimmed.
You can find the needed information on the McCauley Propeller web site. This condition is covered in Service Letter 1989-2C.
You can review the service letter at...
www.mccauley.textron.com/home.html
Once there, select: Product Support
Then: Service Letters and Bulletins
Then: Active Service Letter Summary
Then: Scroll down to the bottom of page 2 and select "1989-2C". That document will describe McCauleys position and specs relating to your problem.
By the way... Good decision to ground the airplane until you determined the required action.
Jim