Hello Rick,  This tip was given to me by the late Ralph Heintz, one
of the best musical box restorers for many years.   I have used it
successfully on my Reginaphone, which had a fair amount of the white
powder on the leads when I bought it.  The product to use is TSI 301
lubricant from http://www.tsi301.com/ 

All you have to do is spray the 301 on all the leads.  The 301 soaks
into the lead and prevents any further powder from developing, and
also seems to eliminate the powder that is there.  I did not have to
remove the existing powder before spraying the leads.

I used this on my Reginaphone over 25 years ago, and there has been no
further powder residue.  It is also a superior lubricant that outperforms
many other lubricants.  I use it all the around the house, etc.

Their other similar product, TSI 321, is excellent for plastic, and has
no solvent.  I have also used that with great results.

All the best,
John Del Carlo