I'm sort of having the same problem as doomsday is below but the twist with mine is, it goes in reverse no matter what gear I have selected! I have checked the arm on the driver side of the transmission and it moves just fine when the selector is moving. The oil smells a little burnt, but planned on dropping the pan and just refilling it completely with ATF.
Hopefully the trans isn't shot, because just swapping the transfer case was a chore!!
Hopefully the trans isn't shot, because just swapping the transfer case was a chore!!