SOUNDS LIKE A BAD HUB TRY THIS TO DIAGNOSE THE PROBLEM
Put the transmission in park, set the parking brake and raise the chassis so one of the front wheels is off the ground while the other is still on the ground. When the transfer case is in two-wheel drive, the hubs should be released allowing the wheels to turn freely when spun by hand. If the axle shaft turns when you spin the wheel, it means the hub has not disengaged.
To check engagement, rotate the axle shaft backwards. This should lock the hub. Try turning the wheel by hand again. The axle shaft should now turn with the wheel if the hub is locked. If the hub fails to lock, the hub will have to be disassembled and inspected or replaced.
To check release, hold the axle shaft steady and rotate the wheel backwards. You should hear a click as the locking mechanism slides back out and disengages the hub. Rotate the wheel forward again and it should turn freely.
Another way to check the hubs is to raise the vehicle on a frame contact lift so all four wheels are off the ground. Then start the engine and place the transfer case in four-wheel drive and the transmission in drive. If the front wheels don't turn, look at the front axle shafts. If both shafts are turning, but one wheel is not, the problem is a bad hub on the wheel that isn't turning. If the front driveshafts are not turning when the transfer case is in four-wheel drive, the problem is inside the differential (broken side gears) or the transfer case (broken chain, shift linkage, etc.). If the driveshaft between the transfer case and differential is turning, the problem is in the differential. If the driveshaft is not turning, the vehicle is going to need repairs to the transfer case.
Hope this helps.
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