Yeah Mike, that makes total sense to me. I'm going to stick with the bushings. I was getting the horrendous dry bushing noise from my right axle (I've had this before but this time it way worse than any I've ever heard). I found that the clip had come off and the axle and it was slopping around badly in the bushings having pulled in a little without the clip. When I pulled off the hub and checked it out it seemed like the axle was a very sloppy fit in the bushings. You could move it all around radially. I thought the bushings were surely shot from the slopping around with no clip for a long time. But... I dug out a spare spindle and axle and from a truck I stripped (axles/bushings were fine before I parted it). Low and behold the fit was just as sloppy. In looking at the axle shaft there is ony a machined surface for the inner bearing. The outer one has a lot of clearance. Seems that the hub keeps it centered and it does not even contact the inner surface. Seems like the outer bearing is just for thrust. I tried lubing it with my homemade lube tool and it was only minimally better. I think that since the axle was not drawn tightly into the inner bushing and a lot of crud/salt got in there and I must have not gotten it clean/lubed enough. I will re-lube again and see what happens. Still could be that the inner bushing is actually damaged but I am optimistic now and itching to try the lube again.
Concerning the lube, I have spoken to quite a few mechanical professionals (heavy equipment and general mechanical heads) and most recommended the moly based black/grey grease for brass alloy bushings in an application like this... but I know many people have had no problems with the high quality non-moly stuff. Toyota recommends moly grease also. So it seems in real life either works well as long as there is lube in there.
Keeping my fingers crossed on the bushings...