Hey Bruce...
A good many years ago, I was running a 25" Heavy Duty lathe in the shop at RK LeBlond. I was turning a tailstock spindle for an NK or NQ lathe, don't remember which. It was a sizeable log of steel, though...perhaps Ø10 inch by 60~70 inch OAL.
Anyway, it was chucked in soft jaws and supported by the tailstock center. I was watching one of several long OD turns when the spindle/workpiece instantly stopped rotating!
No slow down or coast one-half revoltion, just BAM...stopped dead, broke the tool, etc.
I pushed the spindle control lever down to the stop/brake position immediately. I called the leadman over and we bumped the spindle jog button, tried the spindle control lever, shut off and restarted the electrics, nothing worked.
After a bit of study, we found the same situation as you did, the L3 spindle nut had backed off and was wedged against the front spindle bearing cap. The big tailstock on the Heavy Duty was taking all the thrust generated by the threads in the spindle nut and had stalled the spindle!
We worked on the spindle nut with a spanner wrench, BIG babbitt hammer and a pipe for a while (maybe we should have just backed off the tailstock spindle a bit
) and I was back in business!
That was an experience I've never forgotten!
From the "older & wiser" perspective, I'm really glad that happened on a chuck and tailstock process, rather than on a chucker job!
Mike