The same thing happened to my dads 1979 Stihl 028WB. As Dave Fix stated, the Nylon gears behind the chain drive clutch under the plastic cover have probably stripped. I couldn't find a replacement for this about 10 years ago, however Oregon made an upgrade/conversion kit. This replaced the oiler, oiler worm gear drive star and chain drive star. Gave it the full floating chain drive.
Luggnutt, February 2012