Sounds like a problem with the clutch or the sprocket. The engine would labor if the brake is not released, it would be like trying to drive the car with the parking brake on.Does it have a rim or spur sprocket? If the latter, the spur may have separated from the drum.
What do you mean by 'safety notch'? The brake should be on or off.

Posted by canguy: "What do you mean by 'safety notch'? The brake should be on or off."

That is what I thought as well - The Brake should have an on and an off setting but I seem to be able to move it to 3 positions (Brake Off, Brake On, and the 3rd which is one beyond Brake On). When it is moved into this 3rd position the chain will move when revved. Prior to this problem starting this afternoon I had only noticed the On and Off positions of the brake.

As for rim or spur sprocket. I am not sure, I did not take anything apart at this point. I am assuming it is a rim sprocket.

I would take the bar and chain off and see if the clutch disk is free. Could be the needle bearings. I'm not familar with the 500 is that a new poulan or and old saw? If it a new poulan with plastic molded around the clutch I would suspect the plastic molding has melted and pinching the clutch... see this on the latest model of poulans saws. As canguy suggested it could be the sproket gear teeth has deep notches worn and the chain gets bound up in the notches

I suspect he has an old Pioneer-Partner 500.

Yes it is an older saw.