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I'm having some difficulty removing the brake arm from the central shaft. It's seized solid on the shaft and I'm assuming it should be moving freely given the fact that it has a grease fitting and I certainly don't want the brake to move in conjunction with the clutch.

Any tricks to getting this thing off besides penetrating oil and MAP (no success with this method yet)? Am I missing anything?

Unbolt the pedal assembly support from the frame and get her up on the bench to help with both penetrant and heat application. You may need to use a press.

Thanks Wes. It took a bit of work but its finally free. I'm wondering if I should replace the shaft or should this work with a bit of cleaning?

That depends on the quality of fit and performance you want from the assembly. It will work reasonably well with all that pitting and the wear grooves but I would look for a new tube assembly.