I can't imagine a transmission guy dismissing the transmission and not letting you know about a clutch, transfer case or torque converter. I had a suburban with a manual transmission and when the clutch went out it acted just as you describe. There weren't many manual transmissions in the late 1990's so I suspect the converter or transfer case. Physics says it's impossible to gain RPM but not speed unless something between the engine and tires is slipping. You don't hear your differential sounding like a rock crusher do you?
