If the transfer case is working so that you get 4x4 high and 4x4 low then you probably have a vacuum problem. If it is not, then check to see if the shift linkage adjustment has slipped.
If a vacuum problem then check the hoses to the shift mechanism on the front axle. The t-case has a rubber block on top of it that the tubes connect to. From there the tubes connect to a steel line that goes up front to another hose to the shifter. If the hoses are ok test to see if you are getting vacuum to the block on the t-case. Also check to see that the shifter on the front axle is not stuck.