Daaaaaaamn!!! now that's worn out (place explicit pun here) isn't that closer to 20 thou when measured at .480?? sposed to be .50. another thing to check is way width, mine, when I adjust the carriage gib at the headstock it takes more effort near the middle and tailstock end to move the carriage. oil people, use that earl. now, my chip pan with all the chips is more like a slurry of metal shavings lol. and yes 1/2hp is enough, mine has a Chinese 1/2hp motor and can take .050 thou cuts in 4140 with no problem. at about 600rpm, however, I may be wrong but if the start capacitor is failing on the motor it might not want to start with increased load of high gear. when I had my motor wired 120 it would click click while the motor spooled up. now at 220v it spins up to rpm better.
EDIT
I just realized in your pic, next to the back gears lever it has H and L, if put into L the pin must be pulled in the bull gear, when in H the pin must be pushed in, otherwise the spindle wont turn, my turns but you cant cut with it, more of a friction turn. that may be why it wont turn when you say it wont turn in high, also the H and L are backwards, lever up pin engaged, is "High"