OK, this thread is a little old but perhaps will get a response, thanks.
My 1987 m998 does exactly what has been described here. I was driving it one day and it just slipped out of gear. I had to go to L in order to get it to move. Drove it home at 10mph before I started messing with it. Of course I stopped engine to shift.
Prior to this happening I replaced both front half axles, all the steering components i.e Pinon, tie rod ends and follower arm (six pieces). everything torqued and lubed per spec.
With vehicle on the rack I can see both rear half axles look good. they both turn when wheels are turned.
When the thing pops into neutral You can hear what sounds like a penny bouncing around just between the seats.
My question is how can I test the half shafts or differential or transfer case to see what is causing this?
Interesting note: I was originally told that trans fluid was leaking into the transfer case thus overfilling it. So I did a Trans filter change and transfer case oil change. When I took the filter out I noticed that the O ring was on the filter side of the plastic tube that feeds the case. The diagram shows that the O ring should be placed on the case side (top) of the plastic tube. After doing this she ran for a month without a problem them bam it just started up again.
Any suggestions would be greatly appreciated.
ooops almost forgot. I have a very small slow leak from engine rear oil seal if that matters at all.