Hi Wayne,
The only place I use graphite instead of oil is in atmospheric (flame eater) type engines, where the heat inside the cylinder would tend to cook the oil and make it gum up. For air powered engines I just us 3-in-one oil. As far as piston/cylinder lubrication, graphite would probably work but would still need to be checked and supplemented on occasion and that would require some disassembly (removal of cylinder head, etc.). As for other linkages, I think a light lubricating oil will give much better penetration and again...ease of application.
Bill