At the cost they are offering a new replacement, it may pay to to exchange it for a new quad bearing live center, by the time you get new bearings and get everything back together. I recall another member who ended up in a similar situation. You will have a center that should last a life time. I have a few centers for different applications, the better quality ones are a pleasure to use. As far as oil, I would either use spindle oil or ISO32 oil. Most of my centers either have a small screw in the body for oil or a screw at the back of the taper. One of my earlier CNC centers was a Shar's and was gritty and stiff form the start, I flushed it with oil and ran it for awhile, it is better, but I regret getting it. I now use a much smaller CNC point Rohm shown below, and also a Skoda with interchangeable points/tips. I also have an inexpensive bull nose that I infrequently use.
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