Bill, The PC 691 is a popular 1-3/4 peak HP model. I have a couple questions that may help you find a solution to your problem. First off: How much wood are you trying to remove in each pass? No more than 1/4" of depth per pass is a safe amount, this will help prevent overheating the motor and improve the accuracy of the cut. You say you start out with a 1/2" wide dado cut in your 4x4. I would suggest you widen the dado to 1" before making your final width cuts and sticking to the 1/4" rule. This means more passes but should improve the cut quality since the bit will only be making the final cut on one side. What type of wood are your 4x4's and how long are they? Are you giving your router and bit the chance to cool down between each 4x4? Once a bit has slipped in a collet there is a chance that either the bit and /or collet has sustained damage of some sort. A careful examination of each is in order. When installing the bit, do you insert it all the way and then back it out 1/8"? This is needed to allow the collet to properly grab and hold the bit. Your router should still be fine, but I would suggest taking it to a service center and having them go through it if you have concerns. And yes, your bit can be sharpened. Depending on what type of bit and which brand will answer if you are better off replacing it. Most often sharpening a bit will reduce the O.D. slightly. I hope this helps you get your project completed.