You guessed it. That's moon dust caked on with a little bit, or maybe a lot of wax based lube. I was quite surprised to find that the drivetrain wasn't completely worn out.
No, that's not the wax based lube leaking down the fork, it's fork oil. The crazy thing is that this bike wasn't near as bad as the one that inspired the making of this blog. That bike started out with a fork service, but when I got the lowers off the stanchions were gone, the bushings were toast and there was mud inside. After informing the customer about the condition of his fork and the logic of fixing or not fixing, he still didn't want to service this one, which was salvageable.
Editor's Note: Originally published 3/3/10.