Cause of oil dripping from needle shaft - Juki DDL-8700

Turn wheel until needle rises as far as it will go, Lubricate that bar inside that goes up and down above the bracket or housing that holds it, Also take note if there is a lower bracket that also needs to be oiled. Make sure you got the bushing around the turning shaft nearest the handwheel, and make sure there is not a thread wrapped around the shaft nearest the handwheel. (Behind the handwheel,)

Oiling the needle bars

1. Too much oil may drip onto sewing project.
2. Put a drop of oil onto the hook once a day before use.
3. Apply one drop of oil on the lower needle bar above the felt washer every 40 - 50 hours of sewing time.
4. Apply only sewing machine oil. ...
5. Do not apply too much oil.

Try putting a small drop of oil on the the metal shaft of the bobbin winder if it is not moving freely. The grinding noise implicates the winder tire may be ground from the locked winder shaft. The needle not disengaging requires oil in the shaft bushing. On this machine it appears you would have to remove the covers to access the appropriate areas.

it may be cotton threads around the bobbin shaft causing it to jam up
take it to a sewing machine service center and have it serviced

It's possible that you have threads wound somewhere inside the machine. Likely places are the tension unit and near the hand wheel.

Virtually impossible for the needle bar to be bent, I suspect a very small piece of thread stuck in the raceway area

There is usually one source for this problem, and it's easy to fix. Take the end cap of your machine as if you were changing a light bulb. Now you are off...When you switch from straightstich to zigzag, the levers operate across and inside the body so that the needle shaft, you watch it going up and down, can also move sidesways (but only a few mm's (about 3/16 inch)) The needle shaft should both go left and right, freely. It is hinged at the top but half way down ththe shaft it "floats" in a two sided guide. This sounds complicated but it truly is NOT. What happens to neglected machines is that "gunge" forms in the sliding parts and stop the left and right deflections. You my need to prise open the shaft from it's guide to start with (be gentle) but a few drops of oil normally soon allows the needle shaft to slide side to side.
When you can shake the needle shaft from side to side BY HAND (with the machine set in the zigzag mode) replace the end cap and start zigzaging.
And in future oil your flaming sewing machine.....

try these suggestions & see if they help

Sewing machine skips stitches
1.needle inserted incorrectly--flat side of the needle faces the shaft
round needle--groove of needle faces away from the shaft
2.Correct needle insertion is mandatory for proper use.
Raise the needle bar to the highest point, then loosen the clamp screw to remove the needle. Place the new needle in the clamp with the flat side of the needle facing the back of the machine.
If round needle--the groove in the needle faces away from the shaft
Push needle all the way up to the stop or as far as it will go.
3.possible bent needle--lay needle on flat surface & roll needle over, if the needle does not roll good -replace
4.blunt needle point--needle makes a popping sound when needle penetrates the fabric--replace needle
5.needle not all the way up in needle holder--loosen needle clamp screw & push the needle up until it stops then tighten screw
6.incorrect threading--one step missed in sequence of threading can cause machine to skip stitches
7.wrong needle in machine--check instruction manual--some machines can use a generic needle with no problem--some can't--
8.size of needle & thread not compatible--
Using the wrong type needle can cause problems,,
A needle to fine for heavy fabric can bend or break when it hit's the fabric
And a too large needle can make puncture holes in the fabric and pull unevenly while stitching

Make sure that your needle shaft is not stuck, move it back and forth, oil if necessary. I had it happen to me once, but mine was caused by a bent needle shaft after loaning it to someone, and I had to do this each time I wanted to zig zag stitch. .

You oil this machine anyplace that it moves and rubs. Needle bar, joints that drive the needle bar,end of each shaft, presser foot bar,hook race etc. Do not use 3 in 1 oil. Use a good quality sewing machine oil.
sewman7