1999 Toyota 4Runner not sure if tranny or transfer problem

My father in laws 1999 toyota 4 runner has been "loosing power" and tonight it acted like it was pulling a larger trailer load. He said it's been lagging and making funny noises as he slows down on the highway, to include making a pop or snap sound as it decelorated. He pulled into a enpty parking lot tonight and stop the 4 runner and as he put it back into gear it didn't want to move the rpms went up but it didn't move. He had it towed home and when I returned from work about 3 hours later he went to show me the issue and it backed up no problem, pulled foreward without an issue but in about 5 minutes time it didn't wanna move forward again. Any ideas what the issue could be.