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Engine/Transmission (1994 - 1998) Transfer case question

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A neighbor brought a 97 auto over last night with the complaint, initially, that she had no 4 wheel drive. As I got to looking at the truck and quizzing her more what she has is 2 wheel high ALL of the time. Irregardless of where the transfer case selector is (even neutral) she is still in two wheel high. I inspected all of the linkage and it is all functioning normal (ie. turnig the shaft that enters the side of the case).

My guess is that something has come apart inside the case where the "selection" is made. Has anyone experienced something like this before? Am I looking in the wrong direction?
 
If it does not shift into low range when you move the shift lever to 4 low then there is probably a shift mechanism problem. If it does go into low range and is still in two wheel drive then you probably have a vacuum related problem. You want to make sure that the shift linkage adjustment is not a problem. Do this by disconnecting the shift rod and try to put it in 4 low by moving the lever on the transfer case by hand.
 
Thanks guys! I did check those things. The "telling" part of this story is ... . irregardless of where you put the shift lever~you are still in two wheel high (Even if you put the transfer case in NEUTRAL :confused: )

That is why I suspect something came loose "inside" the transfer case.
 
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