In the H you have one bull gear with a cast differential assembly in the center of it.
The differential assembly supports a 45° bevel gear on each side serving as the axle drive gears, one for each axle. The splined inner end of the axle slides right into these axle drive gears.
Between these two axle drive gears are two 45° bevel pinions which horizontally span the gap between the vertical 45° faces of the axle drive gears.
Now you have two vertically faced gears standing face to face (not touching) with two 45° HORIZONTALLY facing bevel pinions spanning the gap between the two axle gears.
The bevel pinions ride one single shaft that is supported by the center casting of the differential assembly. Under normal the bevel pinion shaft tumbles end over end as the bull gear rotates. If that differential assembly and the bevel pinion shaft is NOT moving (for whatever reason) then the wheels cannot simultaneously roll in the same direction!
If the differential doesn't move then the rear tires will either skid or roll, one forward and the other back.
The rear wheels and drive train will continue to work like this until either the bind (whatever is locking the system) disappears or something breaks! Sounds like your head gasket is what "broke".
I've seen the key between the high speed (third gear) and the bull gear's drive pinion shear. Most everything has to come out of the transmission case to fix that so you may be lucky if the head gasket is all that broke!
Hope that helps.