The motor might indeed be junk but since you're stuck with it...
The Teflon is a spray lube in a can or tube. Bike stores have it and I've seen
it for about $15 a can.
I ran into some 100% silicone at my shop and sometimes use that. That's also
a spray in a can. I spray it onto a paint brush and apply it that way.
It works fine but I have to apply it every 10 flights or so. In a pinch I've used
just 3 in 1 oil and even gun oil.

micro, I'm having my doubts about using a 10" wing span. I slapped together a
10" model and hooked up an N20 with a capacitor. The planes flys really good but
has a slow climb rate. The N20 & cap weigh 7.2 grams.
The AA works are going to weigh about 10 grams, so maybe an 11" or 12" wingspan
might work better.

Also I noticed your model has less dihedral than this one. Did you find rolling to
be any problem? Might make another one with less an angle, maybe that will help.