I have a 98 blazer that I replaced the vacuum lines around the motor on. Everything checked out when I did it, all the connector valves move air, and were put on appropriately. The actuator under the battery is now fully depressed all the time with constant suction. I can shift into 4hi and 4lo but in 2wd it seems like it's not disengaged. It's in posi lock 2wd all the time. Please help.

 

On the 1999 there is am electrically actuated vacuum valve between the front axle engagement vacuum actuator and the vacuum supply. It hangs at on the upper lip of the firewall above the distributor. I've heard of the hoses to these being hooked up backwards causing problems. Is it possible something like that is going on with your system? Perhaps your vacuum valve is not working or the electrical connections to it are bad?

 

Since yours is a 98 you need to look at the SPID sticker in the glove box to see if it is a ZN4 extended build. They would have the 99 electric switch on the firewall. All other 98's would not have it. GM must have had a very successful marketing scheme that year and built additional 98's a month into the 99 schedule with all the 99 components.
If you want to double check your hose routing see this:

 

I think Christine has the answer and I believe its not a year thing but a 4 button 4x4 thing and on mine the top nipple of that firewall vacuum switch goes to the actuator , the bottom nipple T's off going to the vacuum ball in the fender.

 

I accidentally reversed these on mine once, and it caused the exact problem he is having.- it is likely his issue if he has a 4 button r-case

I believe Strangerock is right, it's a 4 button thing. 3 buttons don't have the valve, 4 buttons do.

 

Just an update it's a three button 4x4. All the hoses going to the transfer case are correct. Talked to the local wrench turner and he thinks it's the transfer case switch. He explained that if it is broke or not operating properly it won't switch to the outside air source. Thus causing constant suction but allowing 4x4 to operate. I'll change it out and see what happens.

 

The actuator switch on the transfer case was the culprit. It was stuck open leaving the vacuum engaged at all times. Thanks all for the input.