You would think that even with a little build up, it would spin, just slower. I am wondering if the motor is bad or if the ESC has a setting that disables the motor if there is too much resistance.
If I replace the bearings, is there a chance the motor will work or should I just start looking for a replacement?
I have seen from other posts that you are looking for the replacement. Good choice.
But in the mean time, as you have unmounted motor and esc, you can try to understand who is damaged by replacing the same part of the arm opposite to that you have unmounted from.
This because in that arm the motor rotates in the same direction of the one that is not spinning, while the motors on the other 2 arms rotate in the opposite sense.
I suggest to try the motor first.