Assuming you're referring to the transfer case gear shift, it should be in "high" for normal use
2 wheel low 4 wheel low Neutral 4 wheel high 2 wheel high
On the transmission selector you put your shifter in neutral position and then you can move the transfer case selector to high or low.
from bottom to tom; 4 low loc, 4 low, neutral, 4 high, 4 high loc
The transfer case does, yes.
put it in neutral then shift to 2wd
possible bent shifting fork in the transfer case, possible electical issues. I'd suggest taking it to a reputable shop to have it checked out.
Move the drive shift to Neutral then move the 4x4 shifter into 4W High or 4W low. Afterwards move the drive shift to drive. This is the best way; it reduces torque on the transfer case, therefore extending its life.
Did you try putting gear shift in "neutral" when shifting into 4 WD Low?
The problem is most likely in the transfer case or the linkage. The transfer case is bolted to the rear of the transmission on that truck. The linkage could be misadjusted, there should be three distinct positions for the transfer case, Neutral, Low and High. If you suspect the linkage disconnect the linkage and manually put the transfer case in each position and try it to see if it works, if it does it's the linkage if not the problem is in the transfer case itself.
most vehicles only have 3 positions for transfer case. these are 4x4 high 4x4 low and 2 wheel drive
bad dash switch or bad transfer case shifting seloniod(not spelled right)