I know the old saying of only an expert or a fool will take a scope to pieces but I recently bought an old four power Kahles scope off the net and found the innards were seized up and the guy I bought it off reckons it was alright when he sent it and I must have done something to it and will not take it back.
Oh well into each life a little rain must fall.
The adjustment knobs are very stiff to turn and the point of impact does not shift.
I like these old German scopes because unlike the modern ones they are so much slimmer at the rear end and are better when using them on a small Martini action. 
More room to put a cartridge in and extract.
How does the reticle work though when you turn the adjustment knobs?
Regards, Roly

Don't have an answer. Looks like you have two choices. Send it to an expert to fix it or decide it is worthless and try to fix it yourself. Internal adjustment reticles are usually in a spring loaded ring or tube that is moved back and forth by the knobs. Some have separate adjustments for windage and elevation. Almost guess a broken spring but maybe just gummed up knobs. Think your chances are somewhat less than 50-50 but might work and you will learn something.
Chuck