4x4 question

[Jerry@tx]

Last night i was towing a trailer and had to put it on 4x4high on the beach, but when i left i couldn't take it outta 4x4. The tranny wouldn't shift into higher gears, my switch was on 2wd, i was driving 30 mph on 2k rpm. I stopped but it on rev and it would disengage. It finally disengage when i unhooked the trailer, and put it in rev. The car smelt like tranny fluid when i was stuck on 4x4 driving 30mph. Does anyone have this problem or know whats wrong?