Accidentally flat towed in neutral, now tranny is slipping?

1998 XJ, 104,000 miles. My bad, I flat towed my XJ behind my daily driver. with the transmission engaged but in neutral. Normally, I put the transfer case in neutral, but it was raining while I was hooking up and I wasn't paying attention. I just put the transmission in neutral (x-fer case still in 2H), then flat towed it about 80 miles at highway speeds.

Now the transmission is slipping badly. It won't start from a standstill without obvious slippage. However, if I drop it all the way down to 1-2 it will start rolling (with slippage), and I can switch to overdrive once rolling to drive the truck normally. If I come to a stop, I have to start all over. The slipping is getting worse, but only seems to be in first or second gear. Third and fourth seem to be good.

I'm going to change out the fluid and filter next week once we dry out (I'm in Houston). Any opinions about what else to look for before it goes to the transmission shop??

AW4 is fully electronic with manual override. TCU normally uses solenoids to open and close fluid circuits. Manually shifting forces the circuits open / closed.

If its slipping in 1st electronically and manually then the clutch pack is probably fried. MAYBE there is something blocking the circuit. Either way you are looking at a rebuild or a swap.

What you did left the output shaft spinning while you towed. The problem is that there is no oiling in this mode. You may have burned out any clutches that were dragging or taken out a bearing. I would troubleshoot as normal though and not just assume all is screwed up.

Hit the web and download the AW4 manual. It has a good troubleshooting tree.