The standard fix, after diagnosing the problem isn't a vacuum line problem, light, or sensor, is to replace the vacuum actuator. It's actually a common failure, in my experience.
The mechanical engagement kit is a nice kit. I've also replaced the spider gears and used a solid axle out of a later 2001-2002 that had a solid axle shaft without the actuator. Then there is the expensive free spin kit.... it all depends on how you use it and what cost you want to spend on fixing it....