I have a 05 Chevy blazer zr2 the 4x4 on dash says its locked in and the transfer case clicks in. I have checked the actuator under the battery and it moves freely and is in good condition I have replaced the the vacuum switch on the transfer case. I am at a loss why it says it’s engaged but only the rear wheels turn in 4hi or 4low.

 

Theres a gear inside the case that might be stripped. Theres a thread somewhere on here that someone's would do the same. They took their diff apart and found a gear worn half way through, causing it to say its engaged, but the gear had nothing to grab...