Piano in question is a 1961 Steinway B. The soft pedal on the piano makes a fairly loud creaking/groaning sound as the pressure on the pedal is relieved. It is really audible as the pedal is disengaged as opposed to when first depressed. I have tried dry lubricant on the the key frame/bed with minimal improvement. If I turn the glide bolts down any further, the key tops rub on the bottom of the fallboard and have already begun to scrape the felt away. With the action removed, the pedal seems to operate fine (no noise). Just a guess but it seems to me the keyframe is flexing or rubbing as it slides back into home position. Since i've owned the piano, the soft pedal has always been a lot stiffer than I would like ideally. I'm an amateur tech/tuner and kind of at a loss on how I should proceed.

First of all, raise the glide bolts. I do not understand how you could think that lowering them would help. The classic way of adjusting them is to remove all the keys, put the keyframe in place, and put a piece of newspaper under the glide bolts, and raise them until you can move the paper under them. The weight of the keys will add just enough weight so the keyframe will be barely supported by the glide bolts, which minimizes the friction and wear.

Then check all the screws holding the action return spring in place are tight. Lubricating the ends of the spring that touch the keyframe is most likely to reduce noise when the action returns. But the heavy action hitting the block on the opposite end will alway cause a thump if you do not release the pedal gently.

Check the guide plates in the cheek blocks have no rough edges. If the noise goes away when the cheek blocks are in place but not screwed in, that is likely to be the problem.

The action is heavy, and the spring has to be heavy to push it back. There is no easy way to make the una corda lighter, and the forces necessary for it to work make it impossible to diagnose anything when the action is removed.

Make sure the lyre, the braces, and everything in it is in its proper position and that no joints are loose. The pedals should not wiggle side to side.

Make sure the una corda lever is not raising the keyframe. It is a not uncommon problem on this brand that the mortise for it is too low. You can check it by taking the stack off and seeing if the back rail lifts as you press the pedal.
Regards,

Sometimes the return spring can etch into the action frame and cause noise. Be sure the spring and wood surfaces are smooth and clean.

BDB, Ed and Gene have already given you some great advice, but the above statement stood out for me, and I'd want to back up and address the keybedding first off as it sounds as if this may have been dramatically altered. I strongly recommend the "Worldwide Technical Reference Guide" available from Steinway in NY, which lays out exactly how this can be done very quickly, without the need to remove any keys (yes BDB, I learned that way too!). Among a great many other things, the Guide also completely demystifies NY Steinway sostenuto adjustment, for which reason alone it belongs in every tech's library!

After that, a piano that old would really benefit from a complete overhaul of the pedal box and trapwork assembly with new leather/felt and parts. Check the lyre post joints carefully and disassemble and reglue as necessary. Check that the trap lever mounting screws are tight and the trap pivot pins inspected and lightly lubricated (I use a dab of Superlube synthetic grease from Pianotek Supply for this). Although you already tried dry lube on the keybed, you might again consider backing up and lightly sanding the keybed to remove any irregularities and previously applied lubricants, and then reapply a light teflon spray. I've seen waxes used which can cause the keyframe to chatter as it slides.

Good luck!

I know that there are other ways of setting the glide blocks, but the paper method is easy to understand and does not take much skill. Other methods might be better left for people who do it all the time, recognizing that there are all too many people who will hear about something that requires skill and practice, but think that they do not need either of those things to excel the first time.