Back in the days of freewheels, someone came up with the bright idea of greasing them. And as another example of how stupidity tends to proliferate, suddenly more and more people were doing just that.

Someone (Morningstar) even came up with a tool to pack grease into freewheels so suddenly it became common practice. The problem is that there's absolutely no reason to grease freewheels, and a few good ones not to. Ultimately SunTour and Shimano started saying that greasing their freewheels would void the warranty, but by then the cassette/freehub systems were taking over, so the discussion ended.

Freewheels are an almost perfect mechanical system. There are never moving parts under load. When you're coasting, there's no load, when you're pedaling there's load, but the freewheel is engaged and turns as a unit.

You can restore your freewheel to good function by simply soaking it in mineral spirits, and working/flushing all the grease out. Then lubricate it with oil. Phil Tenacious and Chain-L (I make the stuff, so consider my bias) both have tacking agents to help keep it in place so you'll have a free spinning freewheel, that will stay that way for a long time.