I have a SWAG. Does the blue piece slide back and forth inside the red piece? Or at least supposed to? Because that looks like a great place for gum and/or varnish to have built up. Assuming that's all metal I might drip sewing machine oil down there. I might even be tempted to drip rubbing alcohol.
Also, if I'm looking at it right, I think the blue piece inserts into the little hole in the end of the piece to the left, identified as either 91-009 602-02 or 91-009 702-02. That piece also appears to insert into 91-009 604-05 and 91-009 603-45 and rotate with the lever. That little tangle of parts looks like another haven for gummy crap and looks like it's supposed to raise/lower with the stitch length lever. I could see that being problematic.
That whole area reminds me of old domestic zig zag machines I've unfrozen with all sorts of twisty turny little parts. It can take a lot of patience, oil, wd-40, PB Blaster and heat to free them up. Sometimes a week or two of tinkering on and off.
Just some observations from someone who's never even seen a machine like you're working on.