That sounds plausible. What would be the fix for this though? could i lower the freq of the arduinos pwm for example?
I still think its wierd that it works fine with a small load
What frequency are you trying to PWM the Leds with ?
The MCU pin can only control a rather small current, such as (approx) 10mA (would need exact MCU model no, and which pin exactly, to look up datasheet value). So even a low frequency, such as 1 KHz, is probably far too high, without using a Mosfet (gate) driver (there are other ways of doing it, such as using bipolar transistors, to drive the fets gate).
You could try a much lower PWM freq to see if it helps, such as 50 Hz.
The reason very low loads seemed to work ok (when you tried them), could be because they need much less current, so the linear mode of the Fet (during switching transitions), was able to supply it with little/no voltage drop.
What other posts have said about the gate voltage being too low for the FET. May also be part or fully what your problem is, as well.