What's been going on?

Sorry, I've disappeared for a quick minute.. Still trying to get my VW back on the road. After getting a decent stereo in there to bump the oldies it started giving me starting problems. After much trouble shooting, the starter bearing was replaced. Much rejoice followed but then the gears started slipping. Just got the transmission rebuilt and with a new clutch, I was bracing for the worst.. But it was actually my brake drum.
Here is a pict.. Pretty grinded down. My mechanic wants to raise it since the back tires are cambering so much, but I'll still be low enough to cruise.