I think it's a coin toss as to wether or not you should straighten the rod. It'd be better if it was straight but honestly... if it's off a bit on that length and diameter it's not a big deal. That's probably what is responsible for the creep in the cylinder tho... as it scuffs the piston seals and the packing when it's bent.
As far as the bolt goes... I'd bore the whole works just enough larger to take the next size thread that it will hold. I'd probably bore it deeper into the rod as well... then rethread and Loctite the whole works.
There's nothing cheap about toys for big boys but mabey you get out of this for 500 instead of 1600...