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You likely have direct clutch failure, this is the clutch pack that gives you third gear and is also used in overdrive. Time for an overhaul, after all is 20 years old, and has likely already been overhauled at least once.
i would start with the transfer case . check fluid level and also check your shift linkage to transfer case. also could have worn chain and gears. Is there any grinding noise when you try to shift into four wheel drive ?
Automatic or standard transmision. If it is a automatic check the dip stick and see if the oil is red or black, and if it smells burnt or not. If it is black and smells burnt, you need to overhaul your transmission, which is not unlikell for a 4x4. If it is a std you are still on the verge of needing a new clutch.
my beet mate will be the clutch if it goes into gear and it wont move yeh most common is blowen clutch if it is and auto cheek the trans oil level if that is ok it could be your tourqe converter both ways the gear box or trans will need to come out
start the vehicle, shift transmission to nuetral. then move the 4x4 shifter to the 2wd position. then shift the transmission into reverse and back up a few feet straight, then drive forwards. it should be out of 4x4.
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