I probably would not bother trying to rehabilitate the factory Gibs. I would buy higher quality Brass Gibs from Little Machine Shop and use them. They start out flat and true from LMS, and brass is a lower friction material than the factory iron/steel gibs. As for the dovetails and ways. I would not use lapping compound, but rather KNOWN flat stones on the surfaces. The use of bluing compounds, as suggested earlier is spot on. Chances are the dovetails and ways have errors that are much bigger than hundreds of a thousandth of an inch. Lapping does amazing things when the error is extremely small. Known flat stones are probably a better choice for removing larger errors found on Chinese lathes and mills. The usual cautions apply when using any abrasive on a mill/lathe.