4WD drive can't be in N
I've had this happen twice on my 2001 4Runner Ltd. In both cases, there was bad interaction between the 4WD gears and the regular gears.
Make sure the 4WD is not in N, its center position. High or Low is fine, just not Neutral.
The most recent event was during below freezing temperatures here in Denver. I had the car in 4WD because there was a lot of snow and ice caught up in the undercarriage. This may have nothing or everything to do with this, so I mention it.
When I tried to switch 4WD gears, I got gear-grinding noises. The "A/T P" warning light come on. No matter what gear I put the regular gears into, the 4Runner wouldn't move.
Finally, I left the main gears in N, parking brake on, $WD gears in Low, and let the engine warm up for awhile. I got more effects, but still no joy. Let it sit with the engine off for about 45 minutes. Came back, warmed it up further -- that time, both 4WD and regular gears moved normally, no grinding, no hitch, no difficulty, as if the 4Runner were asking, "I dunno -- what's your problem??" Put the car in Park, and everything is fine as if it never happened. Ugh!
BTW, discovered what I was looking for under U in the index in the Owner's Manual for "Unengaged 'Park' warning light." Silly me. I should have looked under U first!
This thread was very helpful to me -- Thanks for everyone else's comments.