The early (94.5-97) 7.3 Powerstrokes have clutch and flywheel issues with the stock units. The springs in the clutch disc fail and can lock up the disc in the pressure plate. Some of the trucks also used a dual mass (2-piece) flywheel that is failure prone. In either case, it's probably no worse than clutch and flywheel problems. And a clutch problem could cause the exact issue you are describing, particularly if it's one of the springs from the clutch disc hub locked into the pressure plate.
On my last truck I used a South Bend
clutch and flywheel kit and I was very happy with it. They have an awesome solution for the 7.3 with the 5-speed or the later 6-speed trucks. The 7.3 has quite a bit available in the way of good aftermarket clutch and flywheel kits. You're should be under $1000 for parts unless you do all new hydraulics too, that's a couple hundred more. And labor is about 6-8 hours.
The Current Truck (Oct-2013 to Present):
1999 (Early) F-350 Lariat, CCLB, SRW, Black/Tan
7.3L Powerstroke, 4R100, 4x4, 3.73, 37x13.50-18s, '05 Axle Swap, 6" Fabtech lift, GTP38 "D66" turbo upgrade, SCT 4-position chip with custom tuning by me, Straight Piped 4" down pipe through 5" dual stacks, N-Fab full length triple steps, Pro-Tech cab guard and tool box, louvered 5th wheel gate, Hella 500 Fog and Driving lamps, much more to come...
The one I'll miss, (Mar-2009 to Jan-2014):
2000 Excursion XLT 4x4
6.8L V-10, 4R100, 4.30, 285/75-18, 271whp / 388wtq
The one I won't, (Jul-2005 to Sep-2012):
2005 F-350 XLT, CCLB, SRW, 4x4 FX4
6.0L PSD, ZF-6S650, 3.73, 35x12.5-18, 4.5" Lift