I just inherited a 1996 XJ 4.0 4wd with the AW4 transmission that was my uncles.
it will not move out of neutral. My cousin said she was driving a while back and there was a loud boom and the engine died. Since then it has been stuck in neutral.
The transmission oil is black and smells burnt.
When switching from park to R, D, 3 or 1-2 you can hear the engine speed change as if it is registering the load.
the linkage is moving with gear selection.
I do not know if the transfer case is stuck in neutral but it does not look like it.

Will it roll if the transmission is in neutral and the xfer case in gear? WIll it roll if the xfer case is in neutral? Just looking to narrow down if either the trans, xfer case, or something in the drivetrain such as the differential are bound up.

Sorry for delayed response. It will roll freely in any gear and any config or transfer case. 2wd 4h 4l and all trans positions with exception of park just started working after I drained old trans fluid and replaced with new only what was in trans pan though or about 4.6 qts.

It sounds like something let loose in the transmission. Not rolling with the trans in park would seem to eliminate the xfer case or anything downstream as the problem.

Are you saying it drives now or is it still not moving? Big boom sounds like the torque converter turbine to me. Just a guess though.

my interpretation of this answer, is his vehicle works in all gears following a fluid change, but he has no park

if this is the case, the parking pawl may be busted internally, or the engagement lever maladjusted...anyway..needs fixing.

If that is resolved, I would flush the trans with at least 10 Litres of fluid

Yeah, that could be the big bang also. My mother did that once by shifting to park while it was still rolling. I was too young to understand it, but my dad was none too happy.

I only mentioned the torque converter because that's what happened to my Chevy truck....Big Bang! Go nowhere.

Update and clarification: the Jeep does not move under its own power. All forward gears and reverse are like being in neutral...this is true in 4H, 4L, 2wd. After fluid change, park does work now. The transfer case is cycling and engaging as it should and the drivelines do not spin free. Not even sure if last piece is relevant but with a basic understanding (enough to get myself in a lot of trouble) of drivetrains and transmissions this would point me to the transmission or before like torque converter.
Thanks for help again off vague facts. Don’t expect a miracle just know what I don’t know and want to be sure I am heading in the right direction.

you may wish to verify the shifter is actually moving on the trans, and examine a plastic mounting part of the cable that can fail

you may wish to drop the pan, and see if evidence of damage is present

a replacement trans and convertor from the wrecker could be inserted

Also pull the cover on the front of the bellhousing and check that the t/c is still bolted up to the flex plate. I suspect it is, since you said the engine loads down like normal when you put it in gear.

torque converter still bolted up. Dropped the pan and ran a magnet over bottom. No metal shavings to speak of. No broken components that were obvious and would be seen with a quick once over. Brand new fluid drained before dropping the pan. Hasnt been worked through at all and smelled as burnt as the old stuff. May just bite the bullet and head to the salvage yard tomorrow and replace the the trans and see.

Thanks for the tips. Think I am taking you up on the wrecker transmission and heading out tomorrow.

Interchange info in case you need it.
https://www.naxja.org/forum/showthread.php?t=1053970

there is 2 x E-Torx head bolts at the top of the trans...these should be the first 2 you undo, using an E12 female socket and impact driver