ok, when you put the transfer case in neutral (N), its basically like removing the driveshafts; the tranny and engine cant turn over, and thats why the tranny can still be in park (P). according to my 89 owners manual, im right about how to tow it, except that the owners manual also says to turn the key to ACC, and stop about every 200 miles and rev the engine for a minute to circulate oil, and DO NOT exceed 55mph. also, just for reference, the manual says that when towing a 5 speed, do everything the same, except put the tranny in 2nd gear. hope that clears everything up a little.