the thing with the bearings and locknut, is called the headset" its job is only"to hold the fork in the body of the frame , and it only needs to be ajusted if there is movement (rocking) in the fork, as you pull the brake, the stem movement is because the the allen key bolt,is not tight , at the bottom of the allen key bolt , there is a cone shape nut that the bolt pulls up as you tighten the bolt. the treads on the bolt are gone or the cone is rusted away, if you open the bolt is a anti clockwise way" till the bolt comes up a inch, then tap it back down with a hammer, it will free the cone, and you can take out the stem , then you can see what state its in , you can dw40 it , till it runs up and down the allen key bolt free , ill check back here
mick, August 2008