Hi Heath,
I literally -just- went through a bandsaw recondition. I took some pictures of the saw on my workbench, where I just finished replacing the lower and upper blade guides with Bill Mayo's 627ZZ bearing mod.
Burnt oil smell is probably bearing grease, but could be from the decaying rubber tires. My lower wheel turns quite freely, but the upper one is maybe 20% stiffer. It's easy to remove, clean out the old grease, and re-grease it, but be careful with the little spiral snap ring which holds the upper wheel on. It's fragile.
The blade guides don't actually turn all that much unless you're using the bandsaw, then they keep the blade from flexing backwards and de-tracking while you're pushing material through. The original bearings are steel rollers on brass bushings. You can probably clean them off fairly easily. I opted to replace them with 627ZZ bearings as I mentioned above. You will need to buy two "autotrack shoulder screws" and four 627ZZ bearings to accomplish this. The shoulder screw is SS item number 514008, and the bearings are 514011. If you want to replace the autotrack bearings as well, you will need 6 bearings in total. Shopsmith has the cheapest ones I have been able to find. You will need to shim with a washer or file down the lower blade guard slightly so the bearing doesn't rub. I used the shims from the original lower guide roller.
I would say yes, your tires need replacing. The urethane tires Shopsmith sells are very easy to install, but do require a bit of elbow grease. Just heat them up in some hot water and stretch them onto the wheel with a wooden dowel for leverage. When you pull the old tires off, there may be hardened glue stuck to the wheels. I used a wire wheel on my bench grinder to remove all of that crud to insure a uniform smooth surface. I do not know if this is even remotely necessary, but it seemed like a good idea.
One other thing that is a common replacement/mod is the blade guide blocks. Shopsmith sells "cool blocks" which are some kind of (ceramic?) composite material which is supposed to track better, quieter, and improve blade life.
Feel free to contact me if you have any questions. The bandsaw reconstruction is still quite fresh in my mind. :-)
Here are some pictures. The orange tires are the Urethane ones.
Auto-track Bearing Replacement
Lower Blade Guide Bearing Mod
Upper Blade Guide Bearing Mod
Reconditioned Bandsaw Guts