Our 03 had that same receiver. Switch out that hitch it sucks for towing much of anything. Get a frame mounted hitch. We got a brake controller from our local RV store it was a easy hook up. If you still have the manual it has a awesome section on towing
We had the same problem. Ours was a broken cv joint. Didn't look broken but when i took it out the insides were destroyed. Once we locked the center diff it would move again while making some nasty noises engaging.
Check for a broken cv axle. Our v6 wouldn't work acted like it was in neutral same grinding when we put it in 4 high last year unless we locked our center diff. The cv looked ok on the outside but the inner parts were broken.
