So our '98 Expedition, 5.4, 4x4, was going down the freeway, about 55 mph (it would shake at high speeds, so 55 MPH was top speed) and it suddenly jerked and made a sort of clunk noise, and then it was rolling freely. Stepping on the gas pedal didn't make the car move whatsoever. No matter what the transmission was in, (PRND21), it would roll freely. So it spent the night on the shoulder of the freeway.

The next day, when we went to tow it home, it started working (sort of). It would move forward in Drive, but when you step on the gas, it revs up to 4,000 RPM and is barely going 10 MPH, and it doesn't change gears. If you manually shift from 1, to 2, then put it in drive, it gets up to 3rd gear, but once again, extremely high revs, low speeds (around 35 MPH max).

Here's the strangest part: when put into 4x4 LOW, it goes much faster. You can easily get up to around 20 MPH, and it will shift gears, not smoothly, but it will change gears.

From my research on the internet, I've heard that the shaking we experienced before it broke down on the freeway was likely a torque converter problem, so i assume the reason it broke down was because of the torque converter. I think the problem is the stator clutch (It allows the clutch to spin one way but not the other), from what i've read, if the stator clutch is bad, one of two things will happen: either NO power will be transferred from the engine to the transmission (which is what happened the day it broke) OR power will be transferred, but the torque won't be multiplied and you get high RPM's and low speeds (which is the problem we have now)

I know it's a long read, but if you have any idea, please weigh in, we aren't sure if we need to replace the tranny, torque converter, transfer case, or what.

 

You have a bad transfer case. Have it had it happen on several other vehicles.