Ppatch,
I don't recall ever recommending NO lube on the fly. Certainly, you don't want to use a heavy grease in that area. That could prevent the fly from flipping over into the "down" position as the sear nose engages the full cock notch. But, you do need a light oil in the fly hole.
Here's what I recommend for lubing locks: use a good quality oil on rotating parts and a high pressure grease on sliding parts.
Concerning the fly problem in this discussion, it does sound like the nose of the fly is a little worn or short. We've sent a new replacement fly for the lock.
Jim C.
