Sounds like the pawls are not engaging so that could be a broken pawl spring, or maybe they are stuck open in old sticky grease?
The springs were fine, but there was so much crud, dirt, dried salt and such in there that the pawls were sticking in place. There was nothing left that could be recognized as having been grease.
My wife and I spent nearly two hours cleaning crap out of the drum, bearings and gears on the stem. Then I put a thin layer of grease on the stem, put the bearings on, put a thin film of grease on the bearings, then a thin film on the inside of the drum. I used oil on the pawls, but I did put a little grease on the gears. Probably should not have done that.
Anyhow, now its clean so servicing again next Spring should be easy enough. Now I have three more to do...
Oh, this Lewmar #8 single speed had four pawls, two at the top and two at the bottom. The rebuild kit came with 4 pawls and 4 springs, but also 4 circlips and a bunch of other things. I think I'll just order more pawls and springs for the other winches.
Thanks for the help everyone!