Originally Posted by WizardOfBoz

This is good news - having tools is great. You got the driver off. Is the axle still stuck in there?

"Gunky and dirty" is going to apply to most bicycle innerds. You can use a strong detergent (Simple Green) and water, or mineral spirits to clean the gunk out. Use gloves. If you use water and soap, dry scrupulously and any steel parts should get a light coat of oil right away.

I'm still wondering why this locked up. If the axle and bearings can be removed and you get everything cleaned up, it may clear. It may be a simple grease and replace. If so, it probably was a loose locknut that allowed the driver to spin out. Make sure you adjust the thing and tighten locknuts sufficiently.

A note about "banging the axle out with a hammer". Remember, you've got threads on the axle and banging on it with a hammer may damage those threads. If you can, put the nut on the end of the axle so that the axle is almost all the way into the nut. Then put a piece of wood (an old 2x4 or something) on the nut and whack away. But be advised that you should be whacking the thing away from bearings. That is, if you whack on the axle and the axle transmits that force to the bearing cone or race, through the balls, and into the cup, you can dent (it's called "brinnelling") the bearings.

So.... make sure you're whacking the the right direction. And easy does it to start. My two cents, anyway.

Good luck! It sounds like you're learning stuff. And, presuming that you can fix this with a cleaning and repacking and cup/cone adjustment you'll feel pretty cool riding on this bike.