Not a good day

Yes the sure grip could be broke, the cones (at least one side) could be worn out and hanging up or the clutch plates could be smoked. To be absolutely sure of what you've got you need to remove the pumpkin, if it's an 8 3/4", which at first requires the removal of the axles and drive shaft. The clutch type is rebuildable and to some extent so is the cone type and if it turns out that it's actually an open differential and you were lied to then swap your gears to a housing thats got sure grip. If it's an 8 1/4" remove the cover plate and have a look see.

http://www.moparts.org/Tech/Archive/axle/6.html