Take a look at the pinion and spur gears. If it's one of those gears that is missing or has a flattened tooth, there's your problem. Very common problems with the 1st gen Associated 18s. Open gear mesh allows rocks and such to get it and damage the gears. can't tell you how many times that's happened to my 18T
But the catch with that and the part I don't quite understand is you saying it happened right out of the box?
EDIT: About the lower shock caps blowing off. I had the same problem. Make sure if/when you refill them put a bit less then you think you need or it will keep happening, trust me :l
a Mod or Admin might want to move this from Carpet racing?