The general state of rubber and rubber-like products these days is appalling. I can't even begin to list out all the items that have perished in wickedly short order. Its sad really.
The engine steady being longer or shorter makes no difference. All it does is hold the motor in a fixed place. If it was longer, the motor would just be tilted more towards the front of the car. The fact that there is movement means that the bushes are bad or the bolts are loose. While rocking it, have a REALLY close look at both ends of the steady. It could be loose at the bulkhead or there could be rust on the bulkhead, allowing the steady to move about.
Not sure about the MPi cars, but the SPi care also have a steady attached from the gearbox to the front of the subframe. Check that as well. I used the upgraded bushings that Mini Spares sell (require a bit of drilling) in the lower and a rubber/poly combo at the top and my motor is solid.