1. Jack up both rear wheels and put it in park and rotate one wheel. Report what the other wheel does.

Result: A bit of play different direction rotation (1/20 of a circle or so)

[color:"red"]So it won't really rotate, just wiggle a little, and when you wiggle one wheel forward, the other wiggles backwards, right? [/color]

2. repeat above in neutral and report results.

Result: Both wheels rotate same direction.

[color:"red"] And the driveshaft rotates, too? [/color]

3. Jack up all 4 wheels and put it in neutral and tcase in 2wd and rotate a rear wheel, and report if one front wheel turns

Result: Only rear wheels rotate, same direction.

[color:"red"] This confirms 2 above, and that center diff is not locked up [/color]

4. shift to 4hi and repeat 3 and report back.

Result: All wheels rotate, same direction.
I even tried it with rotating one of the front ones but has less effect on rear wheels, compared to the effect of rotating rear wheels on the front.

E Brake was off during all above tests.

[color:"red"] Center diff will dilute effect of front wheels on rear wheels - If you had been in 4hlc it would have been equal. [/color]

[color:"blue"]I now concur that rear diff is not a differential any more - it's locked up, whether by action of the locker or mechanical failure, and you neeed to remove it to find out which. Download the factory service manual from the site listed in the faq's at the top of the forum and read up and come back with any questions, and we'll help you through with the removal. It's not all that hard.
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