The neutral wire in most existing power flow and fault analysis software is usually merged into phase wires using Kron's reduction method. In some applications such as fault analysis, fault location, power quality studies, safety analysis, loss analysis, etc., knowledge of the neutral wire and ground currents and voltages could be of particular interest. In this paper, a general short circuit analysis algorithm for three-phase four-wire distribution networks, based on the hybrid compensation method, is presented. In this novel use of the technique, the neutral wire and assumed ground conductor are explicitly represented. A generalized fault analysis method is applied on the distribution network for conditions with and without embedded generation. Results obtained from several case studies on medium and low voltage test networks, with unbalanced loads, for isolated and multi-grounded neutral scenarios, are presented and discussed. Simulation results show the effects of neutrals and system grounding on the operation of the distribution feeders.