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Nice lathe Steve!
I think you’re probable right about the wicking material. I’m not sure but it seems like something probably needs to be in there to absorb and transfer oil to the bearing.
I know lots of people use different lubricants. I use automatic transmission fluid. In fact I use it on almost all my machine tools. Its excellent as a penetrating oil too and works well breaking up rust on tools. You can thin it down if necessary with acetone which makes it penetrate that much better. I actually have my seized up diesel boat engine completely filled with 50% ATF and 50% acetone right now in hopes that it will break things loose. Worked before. Got salt water in it…again. It works as well as marvel mystery oil and is MUCH cheaper.
Hope this helps Steve,