I have a 1998 F-150 and when shifting into 4 wheel drive (manual floor mount shifter) the drive shaft from the transfer case turns but the wheels do not engage.

Anyone out there that can point me to a diagram of how the axle works?

 

Check the hubs for engagement.

 

I may be wrong on the year , But I think My neighbor's did that a few years ago . It was his GEM mod . Even with a manual shifter , the GEM prevented front axle engagement . Just a thought !

 

not sure about the "manual shift", but most of the 4 x 4 have a vacuum cylinder mounted to the side of the pumpkin and it engages a pin in the pumpkin to tie the driveshaft to the two axle half shafts. Look at the front axle and see if you have two vacuum hoses running to a small air cylinder.
---or maybe you have a cable that pulls- pushes the pin ??