On the chance I can fix/replace the felt, what kind of oil should I use, ATF, engine oil.....?

Also, I assume by grease you mean dielectric grease.

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1999 MB SL500 (110,000 mi)
2004 Volvo V70 2.5T (220,000 mi)
2014 Tesla Model S 85 (136,000 mi)
MBCA member