Thanks everybody. Figured it out from your combined suggestions. It turned out to be a rear drive axle popped loose from the differential. On visual inspection, it looks OK, so I pulled the rear differential, but nothing wrong there. Reassembled everything and it worked.... for about a half a block until the axle slid back out. The axlel is held in place with a C-clip inside the differential, so you have to make sure this is engaged when reassembling everything. I had to remove the spindle arms and give the hub a good kick.
To sum it up for any other shade-tree mechanics out there.
1. If your clutch is slipping, especially as rpms increase, but you don't smell any toxic burning clutch stench, then it's probably not the clutch.
2. AWD subbies have a center differential and a viscous coupling clutch that transfers power from any spinning wheel to the other wheels. Any broken axle, CV joint or differential failure that allows a wheel to spin freely will act just like a slipping clutch.
3. The rear drive axles are held in place with C-clips on the spline shaft, inside the differential. Not sure how this would pop out, but it's difficult to see visually. Try putting the vehicle in gear, and jacking each wheel up, one at a time. If one spins freely, you have this type of failure.