Well i tried in park and it didn't engage.
It's still kinda buggy five mins ago I checked again and the 4wd high wasn't working either. When it does I'll try low on neutral

 

It often helps to be slightly rolling with the trans in neutral when trying to do a range shift (hi to lo or lo to hi).

 

Just wanted to chime in and say thanks for all the great repair info. I have the 4 button and was having issue with axle locking into 4hi. I first checked cable at actuator to see if it would move by hand, which it did, then I checked vacuum hose there and found no vacuum with 4hi light blinking. I then came here and found out that I did not have the 3 port vacuum switch on the TC which I thought might be the problem. Long story short, found vacuum line at solenoid had broken off. I cut line flush reattached and my problem is fixed.

 

Could be several things.

Need to have the codes pulled. You'll need a scanner capable of pulling Ford-specific codes. Don't know if the cheapos will work, but it's worth a stop at AutoZone.