Thanks for all your info! I inspected the PS pump and noticed that the lower bushings are in bad shape, cracked and softened, deeply carved in. Especially the front one. That`s probably the reason that the belt is not aligned perfectly. The pump `went downwards` a little, tilting the assembly a bit, putting some extra pressure also on the upper bushing that came out of the hole towards the front of car 3-4mm. The front seal of the pump does leak in the middle area so I will have to get to Autozone asap and get the parts you suggested and do the rebuild. For now as an SOS solution I used the `turkey fluid extractor`
and took old fluid out, replaced it with the proper atf. System does not have air in it, no bubbles visible but my steering is not Volvo-like so that tells me what`s going on.
Drops on the ground, nothing major but I want this fixed and focus on other treats for the car. Oh btw I did fix the ignition switch as well, well that`s a long story but now it is back and working.