Hey folks,
1. Try Kroil. I have Yet to find a better penetrating oil.
2. I would agree with Miriam. The issue may not be in the Needlebar mechanism at all
Remember these are connected systems. IF you make movement in one area without getting movement in ALL of the connected bits, you will damage something.
My personal method of choice is to take photographs and then pick a part that is a link in the chain and remove it.
You can then see which side of the chain of moving parts is now frozen and concentrate your efforts on that portion