This sounds like a seized Viscous Coupling (VCU) and you are suffering transmission windup. Thankfully you do not seem to have damaged the IRD but will do so if you keep on driving it. DO NOT DRIVE IT. Check the VCU and if faulty replace it (about $1000 for the part). Or, if you are not worried about having four wheel drive take out the VCU and the two centre tail shafts - the Freelander will drive quite well in front wheel drive. If you are short of funds you can put in a new VCU later.
It is easy to take the stuff out with basic tools and torx socket set - just a bit heavy.
Garry
REMLR 243
2007 Range Rover Sport TDV6
1977 FC 101
1976 Jaguar XJ12C
1973 Haflinger AP700
1971 Jaguar V12 E-Type Series 3 Roadster
1957 Series 1 88"
1957 Series 1 88" Station Wagon
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