The write-up is below, but if you'd rather watch a video, I also made one here:
Sorry, the video is lengthy and not as to-the-point as I would have liked, I was making it as I was going along.

Backstory: I was installing rear jump seats on my Discovery 2004, and the righthand seatbelt that came with the eBay “kit” was retracted all the way and would not come out. I read up on seatbelt mechanisms and learned what I could, and tried various techniques, but at the end of it all, nothing I could do would extract the seatbelt. It was simply “broken.”

I contacted the eBay seller and he sent another seatbelt. This did the same thing. Finally I disassembled the mechanism itself. Now that I had two of the same seatbelt, I wasn’t worried about the risk of breaking one. I fixed both of the seatbelt mechanisms, and now have an unnecessary spare seatbelt. It was surprisingly easy, and as I've read lots of posts on these forums where people have said, "It's stuck, therefore broken; get a replacement," I wanted to share my experience with releasing two locked seatbelt mechanisms.

There are two main scenarios you might find yourself in that would lead you to need to fix your seatbelt mechanism.

A. You’re installing a replacement seatbelt, but the new seatbelt is locked in a retracted position. You have removed trim pieces and unbolted the old seatbelt, and you need to bolt in a new seatbelt entirely. This was my case with rear jumpseats. Follow all steps below.
B. You’re just trying to fix the existing seatbelt that’s already bolted in place. Follow steps 1-4, then 7-8.

Here’s how I fixed both seatbelts:

1. Park on a level surface. There is an inertia mechanism that also uses gravity to lock the seatbelt. If you’re on an incline, it will lock the seatbelt.
2. Take off the mechanism cover. You will only need to remove one side, which is the side that has holes in it and a metal piece in the middle. To remove it, there are three, plastic squeeze tabs that you have to push up, one at a time. I used medical hemostats, use whatever works. This is tricky, because just as you get two tabs up and push the third up, one of the first two will pop back into place. The trick is to keep constant pressure on the cover, pulling up on the entire cover with one hand, while you push the third and final tab with your other hand; this prevents the first two tabs from popping back into place. It will take a fair amount of force the first time you take this cover off, but subsequent removals will be much easier. Just try not to completely destroy the cover—you need the cover intact for the seatbelt to work.
3. Once you have the cover off, inspect the inside of the cover. There should be 3 pieces: A red gear-like piece; a white semi-round piece; and another white piece that has the inertia bearing inside of it. Visually inspect the pieces to make sure there’s no obvious damage to them. If anything is clearly broken, then I’m sorry to say, you will have to get a replacement seatbelt. For most cases however, you probably won’t find anything broken, and this seatbelt just needs reset.
4. Uh-oh! Some or all of the plastic pieces popped out when the cover came off!! How do they go back in?? This happened to me the first time I took the cover off, and I can tell you exactly how they go back in: Follow this picture.
   
   The white semi-round piece fits neatly in the right spot, because of that black protruding piece that it locks onto. The red gear piece will only sit flush on one side, so if you can’t tell by the picture which way that is, you should be able to feel it sit neatly into the white piece. Also, the red gear piece will make a “click” noise as you spin it with your fingers. Finally, the inertia piece has to sit in there at the exact right position, and it’s possible to screw that up, so look at the picture carefully and line up your inertia piece just like in the picture. I put it in wrong the first time, put the cover back on, and the seatbelt wouldn’t work. Popped the cover off of both my seatbelt mechanisms and compared , and found I had put the inertia piece in wrong. So make sure it’s in right the first time. I used the black dot on the white semi-round piece to orient where I placed the inertia piece.
5. (If you’re installing a replacement seatbelt) Do not replace the cover yet! First bolt in the middle of the three bolts. Not the actual mechanism housing, but the bolt that sits up above your head. Then pull the mechanism housing down to where it bolts in and go ahead and bolt it down.
6. Now bolt in the third and final bolt for the seatbelt, but only finger tight, in case something gets screwed up. NOW you have the appropriate distance of webbing between the housing, the upper bolt, and the lower bolt. This is the amount of webbing that is meant to remain extracted at all times. When the seatbelt gets retracted beyond this point, that’s when issues occur, causing it to lock up.
7. Spray the mechanism internals down with a quick bit of WD40. This made my replacement seatbelt work more smoothly.
8. Replace the cover. There’s only one way to properly install the cover, and that’s with the inertia piece up and down. You’ll feel the three tabs fit neatly, and they should very easily slide back into place. If you feel a lot of resistance, you might have the wrong orientation.
9. With the cover in place, test the seatbelt. It should easily extract. Pull very gently at first, working it several times, but it should start working now.