No, it doesn't need replacing Ben. It needs to be dismantled and cleaned. Somehow it has got sticky substance in the compartments where the balls have to roll up the sprags to engage, so the balls are stuck and don't roll. This is usually caused by someone having sprayed it with lubricant, but occasionally it has been left out in the rain long enough to rust the balls to the cast iron.
You can get a detailed, illustrated description of how to fix it here:
http://www.tpub.com/content/recoveryvehicles/TM-5-4240-501-14P/css/TM-5-4240-501-14P_161.htmUse the "next" button at the top of the page to access subsequent pages. The key information is two pages further on.
If this is unclear, just post again here and we'll try to help. Remember, one drop of oil on the pivot shaft, and no trace of lubricant anywhere else, especially the balls and ball pockets.