It definitely sounds like the motor to me. Your magnetic field could be cracked or you may have a short in your armature. Either way, you need to replace the whole motor before it takes out your variable speed switch. The motor comes as a sealed unit and includes a new set of brushes. Here's a link to the motor for your drill:
eReplacementparts.com : MOTOR AND PINION [396505-22] - $39.50