I recently disassembled a Newell 229 with a tight handle. Removed the bridge sleeve and a light blue lube oozed out and was on the shaft. I wiped most of it off and put a few drops of Penn oil on the shaft. Reel handle spins like new. Now I'm wondering if I should have used a grease instead..... Any thoughts on this? I seem to recall Penn bridges were just oiled from the top the bridge sleeve.
Oil is better for this spot. Grease is ok too. But I suspect that grease that you found in a part of why the handle was tight.
I will follow up on Jason's thoughts and say what you experienced was OLD blue grease. As Jason said, grease or oil will both work. Regular service is the key. - john