Quite a day! Found the answer to the big transmission question mark, and worked it out.
To refresh: the transmission was stuck in reverse and wouldn't budge.
Started by removing the 6 bolts holding the shifter to the transmission.
It lifted right off and revealed the innards.
Instead of being filled with transmission fluid, it was filled with water!

Luckily after I drained the fluid and gave it a good spray down with Krown, the damage doesn't appear too bad (well, not as bad as it could have been!)
Looking at the top half I found the cause of my issues.
While I'm not familiar with transmission terminology I'll try to explain. When the water seeped in, rust formed on the shaft that the shifter physically moves. It build up at the end near the housing and kept the shaft from moving the way it normally would.
I took it inside and thoroughly cleaned away as much as possible. Slowly the action freed up. I next used the milsurp method of boiling hot water cleaning, along with some good de-greasing soap. I found that dish soap works well generally, and powdered laundry soap is best for stubborn grease. Before you judge it, compare the finished product:
Not too shabby if I do say so myself

. I dried and oiled the whole shebang and took it back out to the jeep. They were re-mated back together with no difficulty at all, and she shifts through all gears with no problem at all.
It will still need to be completely disassembled and cleaned, but that's a big load off of my mind!