Nice bike, you have a good solid commuter build there. The Kool Stop pads in the dual compound went on my bike two weeks ago, they make a good bit of difference from the stock SRAM Rival pads, much surer stopping for my riding needs. +1 for the Phil Wood waterproof grease, I use Bel-Ray waterproof grease for my maintenance work. it sounds like your hubs' grease got some water in it, the brownish/white grease is contaminated stuff. Hope you continue to enjoy the bike, at that price you got a good deal.

Bill