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2nd Gen Ram Tech1994-2001 Rams: This section is for TECHNICAL discussions only, that involve the 1994 through 2001 Rams. For any non-tech discussions, please direct your attention to the "General discussion/NON-tech" sub sections.
I think there are two different but possibly connected issues going on. One is that the front axle disconnect isn't working and stuck engaged. The other is that the shift linkage might be damaged/out of adjustment and the lever can't move far enough to engage 4 Hi. I'd start by looking at the linkage under the truck.