Take the pin and detent spring out from below the brass plug on transfer case inline with high low shaft and look down hole you should see three different grooves corresponding to high ratio , neutral and low ratio when you operate the lever. [do it with yellow knob and spring etc removed 1st to ensure high low selector is travelling full distance. If is not travelling full distance could be jamming on shim pack where speedo housing attaches or same could be full of grease preventing full travel.
The 4wd lock pin being out moves the pivot point for 4wd shaft forward allowing 4wd to engage , but in low with 4wd pin locked the distanced travelled pushes 4wd into gear.
Have a look at post 69 in this link and do some measuring of you shaft positions might be quicker.
Ashcroft High Ratio Transfer Case fitting - Page 2
Doug
The 4wd lock pin being out moves the pivot point for 4wd shaft forward allowing 4wd to engage , but in low with 4wd pin locked the distanced travelled pushes 4wd into gear.
Have a look at post 69 in this link and do some measuring of you shaft positions might be quicker.
Ashcroft High Ratio Transfer Case fitting - Page 2
Doug