It's dry. Some guys do it on a lathe, some guys do it on a crank polishing machine.
As for the rod journals, yes, it's possible for an FE rod journal to be taken down to a BBC size. However, a lot of crank grinders can't or won't, because you end up grinding a lot more than journal surface. You have to widen the journals as well and that eats up a lot of grinding stone.
Find out if your guy can do it first off, then get a price. It will be more expensive than the old 10/10 deal.