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So you have manual-locking hubs (with a lock/unlock screw turn cap), but a pushbutton xfer case. And when you push the buttons, the control module goes click-click, but the 4hi and/or 4lo lights on the dash don't light up?

The pushbutton cases work just like any other... under normal circumstances, anyway. Your truck is in 2hi all of the time. When you push the 4hi button, it should engage 4hi. When you put the transmission in neutral at a stop and push 4lo, 4lo engages.

The problem is that the shift motors tend to get gummed up and dirty and don't shift when the control module tells them to. You can disassemble the motors and clean them.

http://www.glue.umd.edu/~singletn/web/pages/tcase.html

Check out that page for details on R&R the shift motor. It's specifically written for Explorers, but a lot of the concepts carry over.

Lastly on the hubs -- your 86 probably has auto-engaging hubs. You stop the fist time, pull the shifter into 4hi, pull forward and the hubs lock. When you're done using 4wd, you back up to unlock them. Sound familiar? You have to get out and manually engage your new hubs before you use 4wd.
 
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