Ah. I lubed mine thinking the same thing and when I pulled it apart, BOING! that damned little BB on the end of that spring came flying out and I lost it.
Been meaning to send it back to Shimano for an annual service one of these years...

It still works fine - the drag wheel is just a bit wobbly.
As for casting, I guess I'm just prejuidiced against level-wind reels for casting, but that's probably because I pretty much suck at casting conventional reels to begin with....