It must be in the ******, thats the only conclusion I can come up with. It does make a diffrence though.
I had an '86 Firebird that was something similar. I put it into the first drive which was the o/d (then d 2 1) and the car wouldn't move. All I could hear was grinding rotating noise from the ******. If I put it into the d, then it would drive away just fine. There were a set of extra clutches in those 700R trannys, and thats what was gone in my car. So I am assuming these Jeep trannys are of a similar design. Thats probably the diffrence between the 2 versions for the KJ. Chrysler has a history of doing that with their trannys.
Pulling the driveshaft isn't a big deal. Just block the wheels when you jack it up. 4 bolts at the rear end yoke and pull the driveshaft out of the transmission tailshaft. It should be quite easy, but you might wanna do some more reading first.
Just be careful of the u-joints, make sure the round caps don't come off, they are full of little needle bearings.
Check the splines to see if there is anything to make note of(when re-)installing) lube the splines and reverse procedure.
Take it to a shop if you are unsure though. For a few bucks they would charge, it could pay in the end.