Do you have vacuum at the actuator at the front axle?
One line should have vacuum while in 2 wheel drive and the other line should have vacuum when switched into 4wheel drive. It's been a long time since I had to mess with the POS set up and can't remember which line does which.
If you do have vacuum like I described above and the front end is not engaging, swap the lines at the front axle and move the truck forward and back a few feet (with the transfer case engaged in 4wheel drive). I hate the CAD set up on these trucks, they won't always engage the front axle when the truck is stationary. Sometimes you have to roll it forward or back to get the collar to engage the right side shaft. One of the best upgrades one can do to these trucks is a Posi-Lok system. It eliminates all the vacuum lines.