Hi, Tim , welcome to the forum.
Regarding the headstock bearings, assuming they are adjustable plain type, there are a couple of clues. There are rings at the front and rear of the spindle which are supposed to be adjusted with a peg or C spanner. They have the usual marks of a hammer and drift. If you take the cover off the headstock, hopefully you will see two more of these rings either side of the casting. The ring behind the chuck may be a little larger diameter than its counterpart immediately to its left. If it is, then by slackening off the larger one and tightening the smaller one, the bearing is moved slightly to the left, and becomes tighter. The left hand spindle bearing is adjusted in a similar manner, by slackening the larger ring and tightening the smaller. Assuming that there is play in the spindle, it would be advisable to only adjust one end at a time. Plenty of oil is needed for the bearings, and you can probably feel them tightening up. not too tight though and the only way to be sure they are not too tight is to run the lathe and monitor the temperature of the headstock in the area of the bearings. Just warm after 15 minutes is what you are aiming for. There look like the remains of the headstock oilers on the top cover, which will have to be sorted out.
An early Colchester owner may reply to your question, hopefully.
Edited By old mart on 13/08/2019 20:39:49
Edited By old mart on 13/08/2019 20:41:53