it doesn't look like the threads on the axle are messed up. it looks like the threads from the locknut (not a washer) got left behind. if that's the problem, try using your fingertips to wind them back off and you should be fine.

Heh, I just had to replace mine. I'd been riding for probably 2-3 months when I noticed my chain tension starting to go to hell. I was going to fix it on campus between classes but for some reason I never did. Finally on Friday evening I got home and decided to do it. I loosened the outer nuts on the rear axle and 'pink' a little piece of the lock nut falls on the floor. "Aw Crap" So I took it to the good local SS shop and tried to get them to fix it (as they had back in September or October when I really crushed the nut). That failed, one of the new employees told me they didn't have nuts in that threading. Great. So I took it to my usual bike shop and they fixed it in 5 mins. Bikes and More then Spin Cycle in Gainesville if anyone is curious.