Just discovered this while searching for answers to my problem. Hope it will help you with yours
Diagnosing 4X4 Engage Problems
If you like to four-wheel, brush on the trails can rip the vacuum lines from the axle CAD. Carefully check the lines between the frame and the CAD diaphragm, for damage or oil contamination. Numerous people have ripped the lines loose and one person has found that transmission fluid dripping onto the vacuum lines caused them to swell and leak. If there is no obvious damage, proceed with the diagnosis below:
> I have a 97 RAM 1500 Club Cab Sport 4 X4 and I am having
> a problem with the 4 x 4 High and Low engage light.. it just
> will not come on when I put the truck into 4 wheel drive......
> ANY SUGGESTIONS ???
If this truck was mine I would:
1. Shift into 4WD and move truck a couple of feet
2. 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: continue...
3. Attempt to hand spin the front driveshaft If the driveshaft WILL spin, the transfer case is not engaged Check the transfer case shift linkage, problem is in linkage (or in the tran$fer ca$e internal$ <-- yes this means $$, ouch!)
* If the driveshaft will NOT spin, the transfer case is engaged properly: continue...
4. USE CAUTION! With transmission 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 vacuum leak or bad vacuum switch.
* If both lines have vacuum, look for a bad vacuum switch or ruptured CAD actuator diaphragm.
* If one line has 20" +/- vacuum:
o Move transfer case lever to 2WD, measure vacuum again. Lines should have swapped vacuum signals.
+ If No: vacuum switch bad or 4WD shift linkage needs adjusting
+ If Yes: Vacuum motor bad or stuck, or shift fork stuck: continue
5. Remove vacuum shift motor from the axle, attach vac lines to shift motor, engage/disengage 4WD. Does shift motor plunger move at least 1/2"?
* No: shift motor bad
* Yes: Check axle shift fork and vacuum motor for binding