If one of the phases were not receiving power, leaving only two phases with excitation, it would run pretty lousy! It would be easy to check out with an Ohmmeter.
Hi I have checked all the phase and hall wires,I removed a section of suspect phase wire which looked like it had seen heat.
Did you measure the resistance between the three Phase wires
(Green/Yellow, Yellow/Blue and Blue/Green) with an Ohmmeter as Dennis suggested, if so, were they all similar readings?
If you don't have an Ohmmeter, you can carry out a simple continuity check by disconnecting the phase wires from the controller and then shorting together two phase wires at a time with a paper clip between their connectors and then try to turn the wheel, which should be very lumpy to turn.
Do this with all three combinations
(Green/Yellow, Yellow/Blue and Blue/Green) and check that the force required to turn the wheel is similar for all three combinations.
If you find that only one combination causes the braking effect
(eg. Green and Blue wires shorted together) then there will be a break or poor connection somewhere along the other phase wire
(Yellow in this instance).
If all three combinations produce the same amount of braking force, I would say your problem is being caused by the controller.
I am not able to try the following, so I don't know if it will actually work, but it might be worth a try
(assuming the above test gave similar braking/resistance):
Try running the motor with just two phase wires connected at the controller end and see if it will still run as before with each of the three combinations
(Green/Yellow, Yellow/Blue and Blue/Green).
If you find that it only runs on one of the three combinations
(eg. Green and Blue), but runs even worse than before, then it could indicate a problem with just one of the MOSFETs on the disconnected phase output
(Yellow in this instance).
If you find that it runs exactly the same as before, but only on one of the three combinations
(eg. Green and Blue) then it could indicate a problem with both of the MOSFETs
(or the low level switching circuit) on the disconnected phase output
(Yellow in this instance).
Do the phase wires need to be thick as they are carrying lots of juice?
If the phase wires are too thin it will cause a large voltage drop between the controller and the motor which in turn will cause the wires to heat up under load. If the wires are getting noticeably hot, then they are too thin and should be replaced with heavier duty cable.
Motor seems ok like I said, but does have a fair bit of rust on outer magnets, would this cause bad performance?
I don't think that rust on the magnets is causing your problem, I suspect it is more likely to be a phase wire problem or a faulty controller.
Alan