As FBinNY noted, hardened BB spindles are very unlikely to bend. I might also note that a bent spindle would not present as an "up and down motion" but rather a side-to-side wobble. The up and down motion you describe is more likely a result of the teeth on the chainring not being cut perfectly concentric with the bottom bracket axis. This is not unusual, particularly with less expensive road chainrings, and is not a functional issue. To eliminate the grinding on the chain guard, reposition the guard slightly higher so it clears the chain throughout the pedal stroke.