2001 1500 Suburban Trans Problem

My 2001 1500 4x4 suburban w/ 140000 mi has just had it's second major failure in 2 weeks. First the fuel pump (common I guess at this milage), now the trans is bad.

At first, it was only making a terrible 'clank' when accelerating and turning, I though 'differential' so, I set out for the driveline shop next morning. I got not more than 1 mile, and accelerating from a stop and turning left, it popped out of gear and kind of ground for a split second. Thinking the diff had finally let go, I put it into 4wd to try and continue my journey to driveline shop. The truck wouldn't go, so I turned around and limped it home. when I got home, and put it into park, it made the grind again for a half a second.

I droppped the trans pan, changed the filter and fluid like chilton's book said, then tried again. No better. Now, when I put it into gear, I hear a slow 'brushing' sound, and the speedo starts to go UP. The engine starts to rev on its own as well, then I put back into P and the short grind happens again. Truck doesn't move at all now, and trying to educate myself enough to go shop a mechanic who may know which single $.05 piece is making this trouble.

Thanks in advance if you've read THIS far!
:banghead:

Might have broken something in the transfer case, from here this cannot be diagnosed, get it to someone who can do a hands on analysis.