This sounds like it may be a possibility. My friend Capt.Chuck has suggested that it may be a flat roller bearing between the shaft and drum, which I will inspect the next time I'm on the boat, as another possibility. Lewmar sells a replacement kit of 3 bearings and a washer, for about $70 (retail). so it must be something that requires replacement on a regular basis. But this noise is dry sounding and your idea Al needs to be investigated. Thanks.
The noise does not come with any decrease in functionality so I am not to concerned, just interested in solving the issue.