I just read your other thread. Does the lever stay in 2hi if you hold it their and drive or does it still force itself back out? And if you hold it their, does it actualy go to 2wd? Kinda sounds like the fork in the transfer case might be messin up. Thats about a $300 fix if the shop remove the case. I hope I'm wrong. But I would check the fluid levels first. Let me know the answer to these questions, and Ill call a guy I know who does this for a living.

 

The first thing I did was put new fluid in a made sure it was the correct level. There really isn't a problem of getting the stifter up to 2hi, but more the problem of it staying in that position. I can feel it engage something when pushed all the forward, but then it will want to come back about 1/4 of the way between 4hi. This is seeming to put the transfer case in neutral. With the truck off and the shift in that 1/4 position I can actually move/roll the truck like its in neutral. Before the problem started the floor shift could move up to 2hi and stay and back to 4hi and stay. Checked the shift rod and nothing seems bent or loose so I'm guessing it's an internal issue with the transfer case. Now I can only drive in 4hi; which is not fun on dry pavement. Thinking it's about time to take it to a shop.
Fireman2828- I take it out again and try hold the lever up there and see if it will engage.

 

Just came across an interesting article about '97-up 242 transfer cases. I guess this is my problem too.

-One common operating problem with the 242 transfer case is that it will stick in 4wd even if the lever is moved to 2wd. Internally, moving the lever loads a spring which then applies force to move the selector fork. If the gears are loaded with torque, the spring will not have enough energy to move the sleeve off the gears. Once torque is removed from the gears, the spring will then move the fork and slide the sleeve of the gears.

Momentarily lifting your foot off the gas will often unload the gears enough to allow the spring pressure to move the fork. On some high mileage units, a wear groove will form on the sleeve or gear causing it to stick longer and may require a couple of changes from loaded to unloaded to get the sleeve to release form the gear.

Also apparently this is a very common problem with the nv242 transfer case over on most jeep forums.

 

is this only a problem with the manual "stick" on the grownd selectors? i have a dial on my dash and wanted to see if i might face a similar problem...

 

i doubt it that is all moved elctronically w/ little electric motors i would rather have the manual shift than the electronic anyway

 

The problem is on the the NP 242 transfer case with the floor shifter. I spent several hours combing through the jeep forums and there seems to be quite a few who have this problem. The good thing about (if there is one) this is they pretty much have the solution to solve the problem if it should happen. I tried it and it worked on my first try!!!!

Most people have the problem of not getting the transfer case to engage back to 2hi after have shifted from 4wd (4hi). They had no problem of shifting into 2hi, but it was the actual switch over to 2hi that wasn't taking place. There solution work great. It was to drive forward and bring the speed down to 5-10mph. Then put transmission into neutral. While rolling pull the floor shift just out of the 2hi position, any point before you engage back to 4hi, then give a quick and constant pressure back to 2hi. Continue to hold the floor shift in the 2hi position and shift back to drive with the other hand. Give the gas a few quick accerations. Mine engage immediatly, and smoothly, when shoved into 2hi. Some say if it doesn't engage right away to continue to drive for a while (1 mile) and it should go in. I had seen that a few people even recommended to try this solution before the truck fully warms up. I did the before it warms up, but don't know what kind of effect it had. Just thought I'd pass this info along, so if anyone else runs into this problem they have a good referrence to start from. Thanks again to all of you helped with this

 

Thats some pretty good info. Glad you got it to shift. You would think they would do a recall on that problem.