That blue stuff is probably thread locking compound. Still, better blue than red. The red stuff requires heating to 400F or something like that to make it yield. I don't know if penetrating oil will help. It certainly won't hurt. You might try acetone but I'm not sure what acetone will do if it comes in contact with the rubber bushings. You certainly don't want acetone on painted surfaces.
One thing I can recommend (among the dozen things I'm thinking of) is to break the nut with a nut splitter and start with a new nut after you clean the shaft.
Here's a Rube Goldberg alternative (www.rubegoldberg.com
for those unfamiliar): If there are enough threads exposed, put two more nuts on the threads. Tighten the two new nuts against eachother, but not against the original nut. This should allow you better leverage to loosen the original nut.
Another thing to consider is that if the washers and rubber bushings aren't free enough to turn by hand, it might not be as tight as it should be, but maybe it's tight enough not to worry about it.
81 300SD ... buy me