Hi Pro,
That last post has contained the most useful information you have written.
1. From what you describe, you hve a muscel imbalance in the hip. Most likey this is the posterior hip muscles casuing anterior translation into the from of your acetabulum - in other words, the muscles at the back are pushing your thigh bone forward into the hip cup and so you are getting arthritis type symptoms from the grinding.
2. Because your body doesn't like dislocating it's joints, the muscle at the front your describe sounds like rectus femoris. This will be working hard to stop your thigh bone from dislocating.
3. When you tense your butt muscles with your leg muscles, you might be restoring the balance in the hip and activating your deep core muscles in some wierd way enough that you can lift your leg painlessly and without so much effort. This actually indicates that your problem is not "weakness" per se because you can't build that much strength so quickly (in seconds). Therefore it sounds like a coordination problem (motor control)
4. Pressure on rectus femoris relieves your pain because you are kind of giving it a rest (trigger point therapy).
When you walk, try thinking of "sinking" your thigh bone towards the back of your hip joint. See if that changes anything...