I suspect some of the teeth on the nylon cog driven by the motor have stripped. The motor turns the gears until you hit the worn portion, then the motor continues to run but there is no drive to the feeder/cutter blades.
I also have this problem. I understand that Xerox will not supply a replacement cog. The only solution may be to elongate the mounting holes of the motor, allowing the drive from the motor to engage more tightly on the cog - but this would be a fair bit of hassle.
Jeff Wall
June 2006