This is really odd. I commented out the tank's physics set up, and then used c_move to see what would happen. The same thing was occurring. I could only move parallel to the world x and y. When I moved it using c_move, the tank seemed to jerk back and forth quickly, as if it was performing thousands of collision detections per second. Then my whole computer crashed, lol. I think I totally overloaded it somehow.

EDIT: I've discovered the problem lies with the tank model itself, somehow. I tried using a plain cube, and it worked fine. Now I'm wondering what could be wrong with this gorgeous model.

It's 4,650 polies, btw. I've moved bigger poly models around before without such problems...