Yes the quill was retracted to eject the live center. But as it was fully retracted, the hand wheel suddenly spun easily and it no longer controlled the quill. Should the quill be pressed out to locate the sheared or missing key? A more descriptive term is hand crank (but there is no functional difference). The hand crank is attached to the quill by a threaded nut. There is no key, cotter pin or anything else. I did remove the hand crank and tapped a piece of wood protecting the threaded rod forward (toward the headstock) about 1/4". It moved with some reluctance, and I stopped fearing that I might be forcing something not easily repairable.
Posting some pictures of the tailstock in its current state would help.
A note on terminology. The hand crank is not attached to the quill. It is attached to the screw that moves the quill.
Not all early lathes used the retraction of the tailstock quill to eject the center. Some used a knockout slot.
Also if you have an incorrect center, ie not a factory one or one not long enough, the screw may not eject it.
The quill should have a keyway machined in it, or something similar, parallel (in line) with the quill.
Inside the bore of the tailstock would be a key mounted inside. This keeps the quill from just spinning as you screw the quill in and out.
Sometimes this key does shear off. When this happens usually both the quill, screw and hand crank spin and the quill does not move in and out.
When you say the hand crank suddenly spun easily, does the quill also spin too and the screw that the hand crank is attached to or is it just the hand crank that spins?
If the quill is not spinning, then something else is going on (probably not a sheared quill key).
It could be the threads inside the quill have stripped out or part of the threads on the screw have stripped out.
When you removed the hand crank was there a pin or key on the end of the screw or inside the bore of the hand crank that locks the hand crank to the screw?
That is needed to keep the hand crank from just spinning when the quill screw engages the center to knock it out.
Rob