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I have a 2001 f250 super crew with manual lock outs, Have hubs locked in and flip switch but have no 4 wheel drive, light lites and I here clunk like engaging but no 4 wheel drive, any suggestions also is there a way to lock transfer case manually.
Lock the hubs and leave the transfer case in 2WD. Then crawl under the truck and see if you can turn either of the axle shafts. I'd estimate you have a bad hub.
If the 4x4 light comes on, then that indicates that the transfer case shift motor has shifted into 4WD. It is possible that the shift motor to shift shaft connection, or the transfer case itself, is physically broken, but this is very rare.
That's why I said to test the hubs. They are the most likely failure point. And the easiest to test.
found bad hub replaced, 4x4 worked, switched to 2wd and back to 4wd would not engage shut off truck and 4wd reengaged, when you switch from 2wd to 4wd on fly it says im in 4wd but it is still in 2wd lite on dash says 4x4. when you switch back to 2wd the 4x4 light stays on does the acturator on transfer case work off of vac. or elect. does the switch under hood have anything to do with transfer case engaging.
I hate to bring bad news, but i just went through the same with my '01 powerstroke 4X4. Since you have lockouts and replaced on you can now eliminat the hubs....
Mine to would only engage into 4X4 high while shutting engine and key off and restarting, would not go into back into 4X4 low or back into 2H. Im assuming you have shift on the fly? My problem traced back to replacing the GEM module bolted behind the fuse panel under dash. This is $525 retail and ford only unless salvage yard. This would be well worth a ford diagnosis first because its an expensive guess if wrong and also if it it ths problem; this module needs to be programed by ford after installation.... sort of a screw job!!! Hope this helps!?