The front wheels won't engage when I shift down to 4 wheel drive. The transfer case is working, because it'll kick into a lower gear when I shift into 4x4 low. What could be the issue? Also, is the 4x4 on the 95's vacuum operated or otherwise?

Which of these does your vehicle have ?

Transfer Case - NVG 233-NP1 (Two Speed Selectable)
Transfer Case - NVG 136-NP4(One Speed Automatic)

The New Venture Gear NV233 is an electronic shift transfer, with the following three modes of operation, Two-wheel drive high range, Four-wheel drive high range, Four-wheel drive low range. The gear reduction for low range is provided by a planetary gear set. The floor-mounted shifter has been eliminated. A switch, located on the upper right side of the instrument panel, is used to select the operating range. The indicator lamps on the switch show the current mode of operation. When the four-wheel drive has been selected, the four-wheel drive indicator lamp on the switch is designed to turn on when the front axle has engaged.


Automatic Transfer Case
The single speed automatic transfer case system shifts automatically from rear wheel drive to four wheel drive when the transfer case shift control module (TCSCM) senses the difference in rotation speed of the front propeller shaft and the rear propeller shaft . Two vehicle speed sensors, one located at the rear output shaft area of the transfer case, and the other, located at the front output shaft area of the transfer case, send front and rear propeller shaft rotation speed information to the TCSCM.
When the front and rear output shaft rotations remain the same, the TCSCM sends pulse width modulation signals to the encoder/motor to keep the transfer case in rear wheel drive. When the front and rear output shafts rotations are different, the shift control module sends pulse width modulation signals to the encoder/motor to engage the transfer case into four wheel drive.
The system will automatically transfer a percentage of torque to either the front or rear axles as required to stop all wheel slip. When the front and rear output shafts rotations return to the same speed rotation, the shift control module sends pulse width modulation signals to the encoder/motor to position the transfer case back into rear wheel drive.
When the transfer case is engaged into four wheel drive, a lamp indicator on the instrument cluster will light. The automatic transfer case system is completely automated, no transfer case control button switching system is required.

Do you know what diagnostic trouble code's are ?

DTC C0300 Rear Speed Sensor Malfunction
DTC C0305 Front Speed Sensor Malfunction
DTC C0308 Motor A/B Circuit Low
DTC C0309 Motor A/B Circuit High
DTC C0310 Motor A/B Circuit Open
DTC C0315 Motor Ground Circuit Open
DTC C0374 General System Malfunction
DTC C0376 Front/Rear Shaft Speed Mismatch
DTC C0550 ECU Malfunction
DTC C0611 VIN Information Error
DTC C0895 Device Voltage Malfunction

Not OBD2 engine code's .

did you turn the locks on the wheels, or check the fuses

Which do you have ?
Transfer Case - NVG 236 (Two Speed Automatic)
Transfer Case - NVG 233-NP1 (Two Speed Selectable)
The NV236 transfer case is an automatic transfer case with three drive ranges. Shifting from rear wheel drive to four wheel drive is done automatically when the transfer case shift control module receives wheel rotating slip information from the speed sensors. The transfer case shift control module then engages the transfer case motor/encoder to position the transfer case from rear to four wheel drive. When the transfer case shift control module receives information that the wheel rotation is the same on both axles, the transfer case shift control module sends position information to the motor/encoder to put the transfer case back into rear wheel drive. The three drive ranges are 2HI, 4HI, and 4LO. The 2HI position is for normal driving with the rear wheels pushing the vehicle. The 4HI, position is for driving through sand, snow, mud, gravel, or heavy rain at normal or slightly below normal speeds. The 4HI engages the front axle to allow for four wheel drive. The front axle is pulling the vehicle, and the rear axle is pushing the vehicle. The 4LO range is used for off road driving, heavy snow, deep mud, or shallow fording. The 4LO is similar to the 4HI except that the gearing in the transfer case is set for low speed and high torque. The NV236 is manufactured at Syracuse New York by New Venture Gear a division of New Process Gear for General Motors.
Is the switch light on or flashing ? If you have automatic 4x4 there are several DTC'S that can set >
DTC B2725 ATC Mode Switch Circuit Malfunction DTC C0300 Rear Speed Sensor Malfunction DTC C0305 Front Speed Sensor Malfunction DTC C0308 Motor A/B Circuit Low DTC C0309 Motor A/B Circuit High DTC C0310 Motor A/B Circuit Open DTC C0315 Motor Ground Circuit Open DTC C0323 T-Case Lock Circuit Low DTC C0324 T-Case Lock Circuit High DTC C0327 Encoder Circuit Malfunction DTC C0362 4LO Discrete Output Circuit High DTC C0367 Front Axle Control Circuit High DTC C0374 General System Malfunction DTC C0376 Front/Rear Shaft Speed Mismatch DTC C0387 Unable to Perform Shift DTC C0550 ECU Malfunction DTC C0611 VIN Information Error

Which of these does your vehicle have ?
The NVG 233 transfer case features a 3 button shift control switch, located on the instrument panel.
The NVG 236 transfer case features a 4 button shift control switch located on the instrument panel.
Do you know what DTC'S - diagnostic trouble codes are ? Both of these 4X4 systems can set DTC'S , Having a professional or factory scanner is what is needed to check for these codes . Not a OBD 2 code reader or autozone , advance etc... The four button system can set a bunch of them .
DTC B2725
DTC C0300
DTC C0305
DTC C0308
DTC C0309
DTC C0310
DTC C0315
DTC C0323
DTC C0324
DTC C0327
DTC C0362
DTC C0367
DTC C0374
DTC C0376
DTC C0387
DTC C0550
DTC C0611

The NVG 233 transfer case features a 3 button shift control switch, located on the instrument panel. When the ignition is in the RUN position, the transfer case shift control module starts monitoring the transfer case shift control switch, to determine if a new mode/gear position has been selected. At a single press of the transfer case shift control switch, the lamp of the new position begins flashing to inform the driver that the transfer case shift control module has received the request for a new mode/gear position. The lamp continues to flash until all shifting criteria has been met and the new mode/gear position has been reached, or has engaged. Once the new mode/gear position is fully active, the switch indicator lamp for the new position remains ON constantly.
The NVG 233 transfer case provides the driver with 3 manual mode/gear positions:
• 2HI - 2 Wheel Drive high range
• 4HI - 4 Wheel Drive high range
• 4LO - 4 Wheel Drive low range
Any of these mode/gear positions may be selected while driving the vehicle. However, the transfer case will not allow a shift into, or out of, 4LO unless the following criteria has been met:
• The engine is running.
• The automatic transmission is in Neutral, or the clutch pedal is applied on manual transmissions.
• The vehicle speed is below 5 km/h (3 mph).


Finding out what if any codes are stored should be your first step .

Not good! there is a sensor in your transfer case that senses that you are now in four wheel drive if your transfer case does not lock in it will set a code and the light will flash and default back to two wheel drive. check the fluid level in the transfer case and front differential for a sign of internal failure. that is causing the grinding sound.

First, start checking the fuses an there is also an electrial activaced switch at the transmission or transfer case that may be bad.

95-96
Your control knob should say 2wd, 4auto, 4low.

First, we need to narrow it down to a transfer case issue, or a front axle issue.
Step 1) Jack up the front end and place it securely on jack stands.
Step 2) Verify that the front driveshaft turns by hand. When turning the front driveshaft by hand, the front wheels may or may not turn. Do not be alarmed if they don't turn. This is normal for your vehicle.
Step 3) Start the vehicle and let it idle. Place your foot firmly on the brakes, place the transmission in NEUTRAL, engage 4low, then place the vehicle back in park. DO NOT ENGAGE ANY GEAR!! The lurch as the transmission engages could cause the vehicle to lurch and potentially fall off the jack stands.**If you can turn the front driveshaft, the transfer case is not locking. This could be due to a mechanical issue with the transfer case itself, or an electrical gremlin with the control system. Start a new thread with the results of your checks, and we'll go from there.
**If the front driveshaft does not turn, the transfer case is locking properly and we need to continue searching.
Step 4) With the front wheels in the air, engine idling in PARK, spin one front wheel. The other wheel should spin the opposite direction. If both wheels spin in opposite directions, then the front axle *should* be properly engaged. Take it for a test drive (after safely lowering it to the ground, of course). If the front wheels do not spin in opposite directions, there is a problem with the front axle. This could be due to a mechanical problem with the diff, or a failure of the center axle disconnect to engage the passenger side axle shaft. Start a new thread with the results of your checks, and we'll go from there.

Troubleshooting the CAD on a 95-96 is a bit more involved than I want to get into here, and the problems can vary widely. This'll get you started.


97-01 4-door and 96-00 Sports
Your control knob should say 4auto, 4high, 4low.
First, we need to narrow it down to a transfer case issue, or a front axle issue.

Step 1) Jack up the front end and place it securely on jack stands.

Step 2) Verify that the front driveshaft turns by hand. When turning the front driveshaft by hand, the front wheels should turn. (If only one turns, don't be alarmed. One wheel sometimes has more resistance in the brakes, bearings, or CV joints. This is normal)
Step 3) Start the vehicle and let it idle in PARK. Engage 4high. DO NOT PUT THE VEHICLE IN GEAR!!! Crawl underneath and see if you can turn the front driveshaft.
**If you can turn the front driveshaft, the transfer case is not locking. This could be due to a mechanical issue with the transfer case itself, or an electrical gremlin with the control system. Start a new thread with the results of your checks, and we'll go from there.
**If the front driveshaft does not turn, the transfer case is locking properly and we need to continue searching.
Step 4) With the front wheels in the air, engine idling in PARK, spin one front wheel. The other wheel should spin the opposite direction. If both wheels spin in opposite directions, then the front axle *should* be properly engaged. Take it for a test drive (after safely lowering it to the ground, of course). If the front wheels do not spin in opposite directions, there is a problem with the front axle. Start a new thread with the results of your checks, and we'll go from there.


'01-'03 Sport and '01-'05 Sport Trac
Your control knob should say 2wd, 4high, 4low

The transfer case in these trucks functions essentially like the 1st-gens' 13-54 t-case. (i.e. it uses a lockup collar engaged by the transfer case shift motor) The troubleshooting procedure is very similar, but you don't need to worry about hubs or center-axle disconnects engaging.

Step 1) Jack up the front end and place it securely on jack stands.
Step 2) Verify that the front driveshaft turns by hand. When turning the front driveshaft by hand, the front wheels should turn. (If only one turns, don't be alarmed. One wheel sometimes has more resistance in the brakes, bearings, or CV joints. This is normal)
Step 3) Start the vehicle and let it idle in PARK. Engage 4high. DO NOT PUT THE VEHICLE IN GEAR!!! Crawl underneath and see if you can turn the front driveshaft.
**If you can turn the front driveshaft, the transfer case is not locking. The shift motor could be falsely reading an incorrect t-case position, or it could be a mechanical issue with the case itself. Start a new thread with the results of your checks, and we'll go from there.
**If the front driveshaft does not turn, the transfer case is locking properly and we need to continue searching.
Step 4) With the front wheels in the air, engine idling in PARK, spin one front wheel. The other wheel should spin the opposite direction. If it does, the system should be properly engaged. Safely lower the vehicle to the ground and take it for a test drive. If the wheels do NOT spin in opposite directions, there is a problem with the front differential or axle. Start a new thread with the results of your checks, and we'll go from there.


Keep us updated.

Remove the transfer case and strip it down,wash it out and replace whatever is worn.
330,000 miles is unrealistic
Your chain is worn and stretched for sure, and rattling and may be cutting into the case.
Don't install another salvage yard unit, unless you can not repair yours. Then strip down whatever you purchase, and go thru it also.

Ford has 2 types of 4x4 system engagement. One is a knob on the dash that you just turn to 4wheel drive high or low. The other system is the 4x4 transfer case shift on the transmission tunnel (hump) between the driver and passenger seats. To shift into 4 wheel drive high while driving, just let off the gas and shift transfer case into 4H position, and continue driving. To shift into 4 wheel drive Low, stop the vehicle completely, put transmission in neutral, shift transfer case into 4Low position, put trans. in gear, and start driving. I am assuming before doing the above, you have locked in ( turned the front hubs to 4 wheel drive position.) Any further questions, let me know.

Check fluid level in transfer case.

shift into 4wd and move truck a couple of feet.
if light is still off, park truck block the wheels set the park brake jack right front wheel and try to hand spin the wheel if wheel doesn't turn 4x4 is functioning properly but there is a wiring problem use an ohmmeter to check the 4x4 switch wiring fuse and bulb
if wheel turns freely the front axle or transfer case is not engaged
attempt to hand spin the front driveshft if the driveshaft will spin the transfer case is not engaged check the transfer case shift linkage, problem is in linkage or transfer case internals
if the driveshaft will not spin the transfer case is engaged properly
with trnsmission in neutral or park start engine measure vacuum on the two vac lines at front axle shift motor . one line should have approx 20" vacuum. other line should have none
if no vacuum measured look for vac leak or bad vac switch
if both lines have vac look for a bad vac swithc or ruptured cad actuator diaphragm
if one line has 20" +- VAC
move transfer case lever to 2wd measure vac again lines should have swapped vac signals
if no vac switch bad or 4wd shift likage needs adjusting
if yes vac motor bad or stuck or shift fork stuck
remove vac shift motor from the axle attach vac lines to shift motor engage disengage 4wd
does shift motor plunger move at least 1/2 inch
no shift motor bad
yes check axle shift fork and vac motor for binging