Yes it's possible the spline and inner teeth on the sprocket are worn out. I posted about the same thing a little while ago here:
http://forums.banditalley.net/viewtopic.php?t=4709There are a couple of photos of splines, one of my bandit which is only a little worn, and one of a gsx250 that is quite badly worn.
I've been told that sprockets can wear out of round. Not sure I believe it, but if they do that might cause your chain to be tight in one position and loose in another.
Alternatively, if the faces of the teeth are worn unevenly, it might have the same effect. What do the sprockets look like?
I had to replace my chain recently, the old one had a tight spot. The sprockets were ok though.
If you're looking for aftermarket sprockets, JT sprockets are one possible brand (I don't know of any others, haven't looked)
www.jtsprockets.com and they have an online catalogue.
I've read that the spline wear can be a problem for GS500's as well. Putting some high impact grease on the spline/sprocket when assembling them is supposed to help. If they are dry and rust, they will wear a lot quicker.