First post. So I have an odd issue I cannot find info on anywhere. My 04’ 5.4 Excursion will not disengage the front driveshaft when In 2wd. I have manual hubs which I know work as the wheels free spin from the axle shafts when jacked up.

The 4x4 switch goes into 4 hi, 4 lo, 2wd normally and all seems to work properly and I can hear the motor move. Lights on dash work respectively. However, in 2wd the front driveshaft is still bound to the transfer case. This causes driveline vibration at highway speeds. If I go underneath and try turning the front shaft It even turns my rear driveshaft.

I pulled the shift motor off and tried seeing if I could manually turn the shift **** to the rear of the vehicle further than it was thinking it may just not be going far enough to be fully disengaged but I can not get it to go any further at all. Is it super hard to move? I was twisting on it pretty hard with vise grips.

Has anyone had this issue? I hope my transfer case isn’t messed up mechanically. I have zero nosies coming from it so I’d hope it is fine. I don’t want my transfer case to explode like I’ve seen happen to people lol

 

Your manually actuated hub locks are not the original production hub locks for the Ex. I suspect that you know this, but I'm just pointing it out as justification for trying an experiment in order of operation.

Experiment:

Go to a slippery surface (dirt or gravel area, wet pavement, grass, whatever).

Lock the hubs.

Shift the Ex transmission into Neutral.

Shift the Ex transfer case into 4 Lo.

Shift transmission into Drive, move forward for 50 feet.

Shift transmission into Reverse, move backward for 50 feet.

Shift the transmission into Neutral.

Shift the transfer case into 2wd.

Shift the transmission into Drive, move forward about 10 feet.

Then, and only then, Shift the transmission into Park, and go out and unlock the hubs.

Test for front drive shaft rotation in whatever manner you used before to determine front drive shaft rotation when in 2WD.

 

Just FYI: if your front locking hubs look like (pictured below), they will be OE from Ford, and allow you to "manually" lock in the hubs should the ESOF fail.
On mine, both with non fluent hubs, ad new ones, I have found the hub teeth didn't always release/disengage following the me turning the actuator back to "Auto" without rotating the wheel backwards a few degrees, of which you can sometimes hear the hubs disengage (soft pop). If your hubs are as pictured, then see if you can understand if they disengage when manually turned to Auto, then follow the steps in the above post.