Just fixed this on my ZJ, as "davigzj" explained. Note that when you take the inner panel off, two screws are easy to miss as they are reached only through small holes in the "furry" part of the panel.
With the panel off, in my case I only had to release a threaded rod from it's clip, and reposition it on the clip to take up the slack. Works fine now.
Guess it's impossible to get the panel off without ruining it if you can't open the hatch. In my case I could open the hatch when I used the key and pulled on the handle at the same time.
1998 ZG (ZJ) Grand Cherokee Ltd, 4L 4x4
Last edited by Bale; 07-18-2011 at 01:34 AM.