I just recently went to Newnes Campground.
Really beautiful spot and its free to camp. There's a '4WD only' section but it just accesses another campground.
I have heard there are a few decent 4WD tracks around the area but we didnt get to them when I was there. The Blue mountains in general is a beautiful area for hiking, cycling, canyoning, 4WDing etc etc.

Check this out for some general knowledge on the area http://www.greaterbluemountainsdrive.com.au/