I finally decided to dig into the problem of my winch-line being so difficult to free spool. What I found is that the grease that is inside from the factory is very thick. Too thick. What follows should take the mystery out of what you will find inside of your winch. Mine happens to be a Smittybilt 8k pound and I'm guessing that other models would have similar guts. This process takes about an hour, faster if you've done it before. The only tools required are the Allen wrench to remove the end plate, a toothbrush or similar tool and an oil pan. I used diesel as my solvent but any degreaser would suffice. I used brake cleaner to get the diesel out followed by compressed air then liberal amounts of MolyB/Graphite grease on all of the gears.
Let's dig in.
First up- Remove the end plate. There are 10 little allens, don't lose them.
You'll notice that there is a pin in the backside of the cover that holds the lever in place. It will try to escape when you clean the goop off so keep an eye on it. If it does escape as mine did, make sure not to lose the small spring and ball bearing that fit into the lever detent. There's also a bushing that rides in the center of the cover- it's in the next picture.
Don't worry, as you do this nothing is going to jump out of the winch through this process. The pieces just slide out but you may need to give them a wiggle when pulling them and putting them back.
Here's the first gear set. Yuck! That goop is the problem. If you notice in the center of the cover there is a bushing. Don't lose it, it may stay in the cover when you pull it, it may not.
You'll notice that the gear sets get bigger as they go into the housing, remember that when reassembling. See those notches in the ring gear? That's what is engaged when you turn your free spool lever.
The second gear set was accompanied by the ring gear as it came out. Look at that paste, it may as well be glue.
In between the second and third gear sets you'll find 2 plastic washers.
Here's the final gear set.
Here's the housing sans gears. Wipe it out good.
With all of the gears removed the spool turns so freely that my ring dropped to the ground.
I used an oil pan to bathe the parts in. About a quart of diesel and a toothbrush did the job just fine. I followed the diesel with a blast of brake cleaner and compressed air to clear any residual diesel. If you don't remove your cleaning solution it will thin your new grease as it mixes.
I chose a Moly/Graphite high pressure grease. It's good for high temp/ high pressure applications.
Installation is the reverse of disassembly. Just slather the grease into all of the gear teeth and the bushing relief. Don't be shy with it but don't get crazy either. You will need to jiggle the sets as they go back in but don't force them, they will go back with little effort.
My end result was being able to pull the line with one hand where it took both and lots of upper body effort prior.
Good luck with yours!