Atlas MFC - loose and jammed arbor?

If you can get the spindle out with the stuck arbor, I would do that. Beating on the spindle bearings can destroy them. A TAP is fine, But beating hard enough to mar things can also damage the bearings. Ball and/or roller bearings really do NOT like impact loads at all.

Once you get the spindle out, there are a lot of ways to attack getting the arbor out of the spindle without doing further damage.

Look at how nice and tight a MT holds a drill in the drill press or the chuck in a tail stock by just popping it in with hand pressure. Think how tight it must be if you are agressivly cranking down on a draw bar. My guess is that you are going way to tight on the draw bar.
 
Thought I had mentioned earlier. I ended up following the pickle fork idea but just used #6 Jacobs wedges at the front with a thin brass shim on the arbor drive side. Pushed them together hand tight, used a C-clamp to tighten a bit more until, hit the wedge on one side with a hammer and it came right out - one hit.
 
Instructions for adjusting the spindle bearings in the lathes are in the appropriate Atlas Tech Bulletins, copies in Downloads under Tech Bulletins et al. There is one also in Downloads for the mill. But whomever at Atlas wrote it omitted one thing. First you tighten the threaded collar until there is zero end float in the spindle and bearings. Then you tighten the collar another 1/16th of a turn. Which happens to be two teeth on the 32T spindle output gear. That "two teeth" was omitted from the mill instructions. Given that the 618 and mill spindles are nearly the same, use the drawings in the mill tech bulletin and follow the slightly better instructions in the 618 one.

One thing that is in the MOLO's but is not mentioned in any of the Technical Bulleting is to first run the Timkin bearing equipped lathes for 30 minutes to an hour to warm the spindle, and bearings. And then tighten 1/16 of a turn. That results in 0.004" preload at room temperature. So follow the instructions in the tech bulletins. I will try to remember to ask Tom at Clausing about that next time that I call them.
 
just got my self an MFC with the same issue. i managed to break the arbor loose by running a mill cutter on the arbor and raising a piece of stock in to the cutter till the stuck MT2 torqued it self loose...... definitely to tight on the draw bar, better to have the spindle driving the arbor so you dont have to over torque the drawbar....
 
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