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I've got a 1985 F150 4X4 with 351W, auto, NP208 transfer case. I just had a 3" body lift put in and 33" General Grabber M/T's. I went to go mudding the other day, and the truck would not shift into 4Hi. It just went into neutral. 4Lo seemed to work, but I couldn't really tell if the front wheels were actually engaged. The shift pattern for the case is 2Hi up top, then 4Hi, then Neutral, then 4Lo. Is it possible that since I had the lift put in the truck has been in 4Hi? It does have less power since the lift, but I assumed it was from the tires, and there is a clunk in the right front wheel when I make hard left turns, or it hits a bump on a right hand turn. Does anyone have any idea what's going on here? I hope I don't have to replace the T-case . . .
It sounds like you've got it figured out. The bump steer definitely sounds like it's in 4.
Another post about 2 wks ago adressed this very issue. It seems the solution was to notch the trans hump where the shifter comes thru the floor pan so the shifter will move forward, since the body lift effectively stops the shifter from moving it's full range.