Darla,
1) Slide the cone pulley back on the spindle up to its nominal running position and then try to determine how much running clearance there is between the bushings and the spindle. Should be roughly 0.002" or less. If much more, order replacement bushings from Clausing and replace them.
2) On the apparent set screw in the cone pulley, read the sticky post at the top of this forum. It isn't a set screw, it is an oil plug. If some previous owner was dumb enough to run the oil plug all the way through the pulley, the only way that I can think of to repair the damage and prevent it happening again is to stud-lock a specially prepared #6-32 Helicoil in the bottom of the hole.
3) Running clearance between the pulley when pushed onto the spindle as far as it will go and the gear should be on the order of 0.002"-0.005". Try setting it to that by slipping a feeler gauge or a strip of shim stock into the gap, pressing the gear lightly against it, and tightening the set screw in the gear. Then remove the spacer and confirm that the pulley spins freely.
Lightly oil all parts during assembly with SAE 10. Do not use grease.
Also, I thought that I had asked whether or not there are any badges or decals on the headstock, carriage or front of the bed. But I can't find it, and so ask again.
Robert D