Michael
You've set a conundrum and caused some confusion here. From your description of adjusting your lathe clutch it is what is unofficially known as the Mark 1, and the clutch is an expanding horseshoe in a drum machined into the inside of the countershaft pulley cluster. However, you say your lathe is a 1963 model, and Myford stopped fitting the Mk1 clutch in 1958, and moved to the one fitted in the countershaft pulley at the left hand end of the countershaft.
So Dave, with his 1963 lathe, is referring to the latter type. And Rick is now thinking its the ML7 type which fitted on the left hand end of the countershaft.
If you have dismantled and cleaned your Mk1 clutch and the actuating mechanism, then lubricate on reassembly so that the push rod especially moves cleanly, and lubricate the visible mechanism at the clutch operating lever end. A drop of oil "down the hole" before fitting the adjusting screw and the locking screw will lubricate the tapered end of the push rod and the sliding wedge which forces the horseshoe into contact with the drum. Other than that then just keep the countershaft bearing oil cups topped up.
The drag you mention could mean that you haven't cleaned the mechanism and its sticking, or you need a bit more clearance on the adjustment. The wedge on the push rod may have got a bit worn and be sticking.
This drawing may help with the diagnosis.
