Hi,
I had this problem recently on a friends Disco 3. Same style of locking nut though. He had been provided with the wrong key for the nuts (by LR!) and needed the problem sorted ASAP.
There are two pieces, both are profiled to match the key and need to be lined up for the key to engage properly. The top, spinning, hardened section is to prevent "removers" being used I think. I couldn't get past it with my extractors therefore took the "wrong" key, attached it via an impact socket to the end of a breaker bar, fitted it on the top of the nut and battered it on with a big hammer.... An impact gun then removed the offending nut whilst letting me keep the mess alligned etc.
Obviously, after it was off, I carefully checked the stud and threw all of the locking nuts away. There were slight scrapes to the counterbore on the wheel but these were minor.
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