That basically means that the ball joint is toast, and you'll need to replace it. I had this problem when doing a friends axle, but it didn't start spinning until I tried to put the castle nut back on...so I didn't quite have the problem you do. I beat the old ball joint out (after removing the spindle)...then used a ball joint press to press in a new joint. In your case, maybe you can press the joint out on the car if you have the right press.
I've heard you can try to zip it off with air tools...if you dont have that access, etc, worst case scenario, you could cut off the nut and the bottom of the bolt, but then you might have a hard time pressing/hammering out the ball joint.
The fact that it's spinning, but the nut is tight...you could probably leave it until it causes a problem, but that doesn't help since you need it off.
Good luck though.