My 97 Jeep grand Laredo got stuck in 4wheel. The rear differential was smoking, but the Jeep still moves. Before I get to most of my questions I have only one at the moment...
I noticed while trying to get it out of 4x4 that the Jeep would not move in neutral.
Is that normal or do is have some serious damage on my hands?

 

It won't move in neutral unless you're on a hill and it rolls. Where was the smoke coming from on the rear axle?

 

I know it needs to be on a hill... After I noticed the neutral issue, the Jeep would not pull up onto the flat bed in neutral, I had to drive it up and off. The Jeep was sitting up hill before they lifted the flat bed. It was in neutral and would not move.

Im wondering if this is normal while in 4 wheel it if I have serious tranny damage.

The smoke was coming from the rear differential. The Jeep still drives, but the turning is very poor. Im wondering if I chewed up the 4x4 in the front wheels.

Any opinions on the neutral issue are needed