Eran says (he's right next to me) that it looks like your boot is tearing. He says you'll proibably have to replace the boot, the bushing that goes around the ball joint, and it wouldn't be a bad idea to get some shift linkage bushings from Energey Suspension (about $15 shipped). He also said it just might be easier to go to a junkyard and drop the entire shift linkage out of another car so you'd basically already have everything intact.