It became necessary for me to find a solution to the sticky d-pad on this specific model of controller. I've had 4 of these now, and I've never seen one that didn't bind in 1 or 2 diagonal directions. So basically I just put some White Lithium Grease inside. I actually went a little heavy on the grease in this picture, you do not need to use a lot of it:
My controller works perfectly now. This fix should last a couple of years at least I would think. I believe the issue lies in the little nubs on the left and right side of the d-pad. They are too small and they allow the d-pad to be pulled into the opening which causes it to rub hard against the surface pointed out in the picture above.
There is a later revision of this controller (no model # on the back of it). The little nubs on the d-pad are much larger and it doesn't suffer this problem. However that particular d-pad seems to have a reduced range of motion and the whole controller just feels like cheap junk.
Hopefully someone else will find this helpful and some controllers can avoid the trash bin.