Continuously-spinning electric motors have commutators to pass electricity between rotor and housing. Certain chemical reactor vessels use something called positive-pressure mechanical seals to transmit lubricants and coolants from bearings to axle. It is difficult to imagine how such things might be implemented biologically, but what human engineers can accomplish is surely possible -- in principle -- for nature.
The anatomist Michael LaBarbera once suggested that the main reason evolution eschews rotation is adaption to environment, rather than any intrinsic biological limitation. Wheels and propellers, he said, aren't necessarily the best ways to get around. For animals in water and air, for instance, the flapping of a flexible foil (a fish's tail or bird's wing) is a more efficient propulsive mechanism than a rotary propeller. Propellers on ships are about 60 percent efficient at converting power to thrust. A typical aircraft propeller is about 80 percent efficient. Oscillating flexible foils, according to LaBarbera, can reach efficiencies of 96 percent. Flapping is better than propellering. (Which raises the question: Why isn't flapping used more often in sea and air transport?)
Wheels also have limited advantages for land organisms. A wheelchair is an efficient mode of transport, but a six-inch-high curb can be an insurmountable obstacle. A bicycle is the most energy-efficient of all terrestrial modes of human transport, but only on hard, smooth, unrestricted terrain. There are few natural environments where wheels work better than legs.
But where wheels work, nature has an adaptation. A small marine crustacean, Nannosquilla decemspinosa, found on beaches of the Pacific coast of Panama, has short laterally-projecting legs and cannot walk when out of water. Cast up on the sand by waves, it moves along by backwards somersaults. For nearly half of each somersault cycle, its curled-up body rolls along the hard, smooth sand. Nannosquilla decemspinosa solves the problem of continuous rotation by making its whole body a wheel and doing away with the axle.
Dr. Seuss's fish with a pinwheel tail may seem unlikely, but perhaps not impossible. Maybe when E.T. arrives in its flying saucer it will come freewheeling down the ramp on spinning appendages.