The problem with the rangefinder is likely a problem inside the camera. A little wheeled lever in the camera rides the back edge of the lens. This lever connects to the rangefinder. When you turn the lens, the rear edge goes in and out, thus moving the rangefinder internals via the linkage, and then the split image in the viewfinder. If the rangefinder patch in the viewfinder is not moving at all, then something is disconnected or missing from the RF linkage. It could even be that the lever that I mentioned is not there or is bent so that the rear edge of the lens does not touch it at the right spot (or at all).
The lens might be worth shooting as is, and you can get another if you want sharp pix. Any LTM lens will go on that camera. Fungus sometimes does permanent damage to lens coatings, so even if it is removed, there is no guarantee it will make for sharp pix in the end.
It is worth having it looked at, at any rate.