Hi, Sir Sam here.
What you are describing is the classic example of a timing belt slipping and the sacrificial rockers breaking instead of your valves bending.
You will need 16 new rockers, and perhaps a few lifters, in addition to all the normal TB stuff. The engine will need to be retimed which requires miller special tools, you need to find a shop that has these tools, can make these tools, or can rent or borrow them.
I just wrapped up this same repair for a customer today, and have done it before. If you are in the vicinity of the northern colorado area I charge $350 for the timing belt job, and $350 for the rocker replacement + all parts cost.
New rockers/lifters cost ~$50 on the low end from Jeep. x 16 = $800. You can get sets of rockers only for around $300, and then sometimes find someone like myself to purchase used lifters off of if you need a few, or just buy a couple of new rocker/lifter combos from Jeep USA to fill the gap.
Having the shop pull the #4 glow plug is a waste of money, its extremely difficult to pull and will tell you less than pulling the #4 injector.
A better method to test the engine is to start it up, run up the rpm to about 1100, then do an injector kill test, either use a DRBIII or other scanner and shut down each injector one at a time, or pull the injector connector off while a helper holds the RPM at 1100. When you get to the "backfiring" cylinder with the injector off you will notice that the loud backfiring stops, but the engine still runs rough.
What is happening on all the cylinders, and is apparently worse on #4 for yours, is that the exhaust valves are not opening properly, this means that the exhaust residual is high enough that it fires out the intake, instead of out past the turbo. When you remove the fuel from the cylinder, you don't get the massive backfire.
Listen to these couple of youtube videos, they will sound familiar to you(they are from a CRD with bad rockers/slipped belt).
http://www.youtube.com/watch?v=4uMv4zLtBzMhttp://www.youtube.com/watch?v=95x7NiozPB0http://www.youtube.com/watch?v=F5v4mJb31sAHere is a thread showing the damage that occurs:
viewtopic.php?f=5&t=62278The good news is that this isn't the end of the world and can be fixed for the additional parts and labor cost of everything past a timing belt(which needs to be done anyway and is why this happened).
Let me know if you have any other questions or want to take me up on my offer to fix it.
_________________
http://www.Colorado4Wheel.com
"Its not about what you can
DO with your Jeep, its about where you can
GO with your Jeep."
Knowledgeable - But Caustic