Here is the parts view of the #303 locomotive.
Take it apart, and clean out all the old oil and grease with Naphtha. Clean all the wheels with Naphtha also.
Lubricate all the gears with a model train grease, and oil all bearings with a model train oil.
The reverse unit in the tender may need servicing also. See here for a tutorial on servicing them.
Port Lines has been in the "S" business since about 1985. It initially began as an off-shoot to our own collecting of American Flyer trains. Realizing at local train shows and NETCA meets...
Here is a video showing general repair procedures.
This should get you on your way to getting your engine running again.
Larry