Check the tiny pin - thats pressed in the crankcase! This gives the oiler piston vertical movement when rotating.
Thouse pin often worn out an can be replaced E.
I ended up buying the 2 early black cased 500's from Kinsie. I had not been deep into one that old, and found it to be a pre 82 with a Ignitron ign.
I also found that the early version oilers did not have the metal pin you mention but instead had a plastic pin made into the plastic housing. I also found the early and later worm gears to be basically the same despite a certain someone saying one was reverse threaded.
The case did have the hole in it to install the metal pin that comes with the later style oiler kit. The saw oils great now.