might be too late, but heres what ive found:

just diagnosed the 4x4 being inop on my girlfriends 2001 ram. the front axle (looking as if you were sitting IN the truck) , the actuator moves to the LEFT to disengage and to the RIGHT to engage. the lines coming off the transfer case are different lengths, as well as the lines from the frame vacuum to the actuator are also different lengths, so it would be difficult to have the lines backwards unless they were replaced with generic vacuum line at some point. different sized tires all around would definitely cause problems.

 

hmm, your directions might be backwards.
collar slides towards drivers side to engage outer axle to inner.
collar slides towards passenger side to disengage outer axle from inner,

 

With the shift fork out, and someone shifting the 4x4, the shift fork moves toward the center axle to engage, and toward the front passenger tire to disengage.. the little collar moves the same, it contacts both axles moving toward the center, and only one axle moving toward the passenger side. My vacuum lines that attach to the vacuum motor at the axle have long lines, and they are in one big plug that plugs into the vacuum motor (Both vacuum lines are separate.) It will plug in either way with ease.. So It may be something some one else has installed. I havent bolted it back together yet, I had to pick up new bolts since mine sheered off, But I will have it done here in a bit and will let ya know. I will try to take some pics before I close it up and see if I can post them up here.

 

Well, It works! For the first time since I've owned it, I now have 4x4!! The actuator housing was on backwards, (I marked when I removed) Not sure if that makes a difference.. but I reinstalled it and watched the fork before I put it in.. I just couldnt get it to line up right with the groove.. Flipped it over and wala.. Fit in! Got in it, and the 4wd engages all the way in and out.. The 4x4 light does NOT come on at all anymore, after I started it and shifted the first time, it went out. but as long as it works, I dont care! Thank you, everyone for all the input and help! Couldnt have figured it out without ya'll!!

 

Glad you got it fixed.....but something is still not 100% if the light is inoperative. Maybe post up some photos and someone can help get that issue resolved as well.

 

I tried to get pics before I closed it up, camera was uncooperative.. I do have to open it back up to fix a sheered bolt. (Someone poured in the locktight on little 1/4inch bolts.. and I mean poured!) I have it sealed up for the test, but it has to be fixed along with two stripped transmission pan bolts.. So as soon as I get the correct bit size and tap I will take pics.. It works really good at the moment.. I tested it multiple times yesterday, and it went in and out smoothly, every time, in 2wd, 4hi and 4lo.. I wonder if there isnt something in the wiring of the light indicator..

 

Installed upside down? That's bizarre. The vent hose should be facing up.

 

the vent hose was.. the actuator housing was upside down, it fits the same either way, two bolts on top and two on the bottom.. I really am not sure if it makes a difference one way or another.. the lines still match up, its just connected on one side or another.. lemme find a picture..

 

http://www.justanswer.com/dodge/3jy5...-remmoval.html

If you look here at the image, number two, the housing was upside down.. see 1, the indicator, and 3, the vacuum motor, they were on opposite sides.. I didnt think it would matter much, but if you look down at the shift fork, it was also on the other side, and didn't line up with the collar right, so it looks.. the mechanic up town said he has seen this happen before.. whether or not it was what happened, or they just missed the collar all together is beyond me.

 

the dash light switch is on the end of the CAD, drivers side. its a 2 wire connector. you can test dash light by removing the electrical connector and shorting the 2 wires. (that's what the shift fork does by pressing in on the switch button.

if the dash light does NOT come on when you short those 2 pins, you might have a blown bulb in the dash. or bad wiring.

if the dash light DOES come on when you short those 2 pins, then you have a bad switch or connector.

the most common problem is mud and sand in the electrical connect. dig out the mud, and spray it out with wd40. if that doesn't help, remove it and troubleshoot, or replace the switch from any parts store for about $15-20.