Yep. I think I am both crazy and very inexperienced with threaded headset assemblies. What looked like 2 threads from the steerer are in fact the keyed washwer and bottom of lock nut.

I replaced upper and lower bearing with new caged bearings just because the bike is 25 years old and I don't know if they are still original so I figured replacing them for a few bucks and packing fresh grease is a reasonable thing to do...I wasn't necessarily having an issue before. It feels pretty smooth now. I am going to put some miles on it tomorrow and see how it feels on the road