Bearings don't come well lubed from the factory.
If you have ridden alot through water or power washed your bike and sprayed it directly onto the linkage area, you have had water come into the bearings, rust and crumble to bits.
How to fix this. take the linkage off the bike and get new bearing. Place it up near the hole and see what roundedness has occured and nicks of metal are in the way. Maybe it is just nicked and a small file can help you out. If you have rounded it, well maybe your toast. Someone may have a fix like jpweld but I am not sure it it will withstand pressures placed on it.
This would be a good time to also take the whole swingarm off and inspect those bearings too. To check if they are toast even before you take the s-arm off, raise the bike so the s-warm is hanging there. With the linkage bit off, raise and lower the swingarm(tire off too) and if any grinding is felt when moving it about, you know you have some more money to shell out.
The needle bearing for the shock is the most vulnerable one of the bunch but it sounds that since it is totally gone, you have more troubles to go through.