4 high lights up in dash but not front wheel enguage, 4 low all works well, is this a transfer case probelm?

 

welcome to df.

this is an odd mix of problems because WHEN the light works, its turned on by the movement of axle locking fork in the front axle cad, which is the final result of all the other rube goldberg movements that occur.

the best and safest way to troubleshoot is to put it up on 4 jack stands, start the engine and follow the motions from the shifter to the cad. the most important event is the reversal of the 2 vac lines at the cad.

see here for all the details.
http://dodgeram.org/tech/repair/4X4/4x4_engagment.htm

 

The shoes on the fork may have worn off and the fork itself is now worn enough that it's not engaging the collar. Only way to know is to remove the CAD housing and check.