Shredding belts.

Here is something many people overlook. V belt pulleys can wear out. Over time, the belt wears out the angled sides of the pulley, creating a hollowed out spot in the middle of the angled face. This is easy to spot if you put a straightedge against the side of the pulleys face.
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If I understand this situation, the belt stops moving, the water pump and P/S pump stop working, but the crank keeps spinning and wears out the belt in that spot.
This doesn't make sense, because for the belt to stop, something has to be causing sufficient drag to make it slip in the pulley that has the least friction, which will not be the crank unless the pulley is simply worn out. If I have the symptoms right, you need to replace your worn out crank pulley.