AWD / Tranny Issue... PLEASE HELP!!

[RSVX]

OK, get this my car drives fine, at least for the most part...

When I slow down by simply releasing the gas pedal it sometimes seems to hesitate dropping into lower gear.

Also when I release the gas pedal it makes a rubbing sound, almost like brake pads rubbing, but not squealing. More of a hissing tone, but it sounds like abrasion. The sound it makes is similar to saying shhhh. I have pretty much eliminated the thought that it might be the brakes due to the fact that if I rev the engine just a little (in neutral, when coasting) the sound goes away.

The only other thing I can think of slightly related is that it seems that I have lost AWD... I can easily break free if Im not careful from a full stop.

The tranny is a remanufactured one about 2 years old, and the car is a 93 with 125,000 miles.

I hope I can get an idea of what I am looking at.