1999 Honda Accord squeal under my distributor cap

1999 Honda Accord mileage: 116,000. All of a sudden I'm am hearing a very bad squeal under my distributor cap when I pulled into a gas station. Upon reaching home, I took off the cap and noticed a lot of clay colored powder underneath. I replaced the cap and rotor and used forced air to blow the inside clean, however I still hear the loud squealing sound underneath the cap when the engine is running. The shaft does not seem loose and the engine runs smooth when it is running. Am I supposed to lubricate something? (With what?) Or is there another problem with the distributor.