Thanks for the replies. I could never get a response from my local dealer to even look at this (I'm seeing a trend that they avoid these repairs as much as possible). I decided to take it to a local diesel shop to see what they thought. They suspect the bottom half of the outer sleeve is broken...
This was a very helpful thread and thanks to those who have contributed. I attempted this repair on my truck today, but I'm afraid I stripped the threads and now the old plug is stuck. I went very slow, loosening and tightening, spraying and waiting each quarter turn or so for about 45 minutes...