Sounds like it could be the clutch. Some models had a "dual mass" flywheel which didn't put up with a lot of punishment (particularly when towing). The face of the flywheel that the clutch engaged was rather thin, wouldn't transmit heat away and as a result cooked the clutches. That may have happened to yours, and if so, you're faced with a choice - exact replacement, or change to a single mass flywheel and a heavy duty clutch (Exedy have been the most popular choice in the past).
Otherwise, it's possible that you've got some damage in the transfer case (very rare), or you've broken a uni (visible from outside). Breaking a CV joint spider gear will cause issues with the front axle but the rear should still provide drive. If you get underneath and try to move the front and rear of both drive shafts you should get an idea of the condition of the unis (any movement = bad).
I suppose it's also possible that the gearbox isn't engaging gears. This may be a selector issue, I've not heard of this being a problem with the Nav boxes but there's always a first time.
Have a look underneath first. If you can put it on a hoist or stands, try turning the wheel on one side and see what the other side does, just in case it's a broken diff - that's happened before, usually as a result of wheelspin with a wheel off the ground and then allowing the wheel to touch the ground before it stops spinning.