Underneath transfer shifter is what is called a "sheet" under the shift lever ball. The sheet is a plastic spacer that breaks up, remove broken pieces and tnstall new shet, available at a Suzuki dealer
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I'm assuming you're talking about the transfer case popping out of 2 high or even 4 high. It could be that the transfer case needs a chain or gears replaced and is slipping on the cogs/gears. In 4 low it takes less pressure/strain to move the vehicle so it doesn't slip. I would put the trans. AND transfer case in neutral, with the FRONT wheels blocked, and NOT running, jack at least one rear wheel off of the ground, and try turning the rear drive shaft back and forth to feel the free play (free play in the transfer case, not the rear end). Excessive free play should tell you that the drive chain/gears are very warn and could be slipping. That would be a start.
Using the shorter gear leaver in the samurai, the gear choices are arranged in a simple U fashion. They are arranged in sequence. At left top, bottom, right middle and right top you have 2 high(2H), 4 hight (4H), neutral(N) and 4 low (4L). 2H- Engages rear wheel drive only. 4H- Engages all wheels in 4X4 mode. N- Disengages all wheels (if you gonna tow your vehicle) 4L- Engages all wheels in 4X4 mode with 50% more torque but you cut your top speed by an equal amount. If you have the OEM gear knob the diagram of the layout of the transfer box should be imprinted. 2 high should be used on dry and mildly wet paved roads. Using 4L or 4H in these conditions may result in damage to your transfer box. You may use 4L or 4H in any other road conditions.
There are three driving modes: 2H, 4H and 4L, which stands for 4x2 High, 4x4 High and 4x4 Low. There is a modification that can be made on the transfer case to add a 2L (4x2 Low) mode, but that's not original. In order to use any of the 4x4 modes you will also have to step out of the car and turn the free wheeling hubs to the "lock" or "4x4" position.
take the 4 wheel drive shifter out, and follow it down, open up ur transfer case and you can will see your shifterforks, order a shifter sheet bushing for around $20 and install it. you can do all this without taking the transfercase off of the sami and it should take around 30 minutes to tear it down, put in the bushing, and put it all back together.if you dont understand that, heres a linkhttp://zukioffroad.com/Tech_Library/tcase_shifter_bushing.shtml
If it has been lifted the Pitman arm needs to be adjusted to recenter the steering.
With the engine off, the trans in gear and the transfer case in 4 Hi or Low you should not be able to rotate the front drive shaft. If this is the case it sounds like a hub problem. Make sure the hubs are engaged. If so the hubs could be rusted and need cleaning to work freely.
1. Use an adaptor for the new front wheel engine and the original transmission of your suzuki ( ask your machinist)
2. Have your propeller shaft from the transmission to the independent transfer case resized depending on the outcome of your engine mount.
3. adjust the bracket of your transfer case if you need more room for the propeller.(optional)
4. you dont need to change gear ratio if you plan to use the same tires
you will have to take the shifter out of the transfer case,remove the shifter bushing, then look down into the transfer case.you will need a flash light,you will see the ends of two rods that have slots in them.take a long screwdriver and move the rods so the notches in them are even with oneanother.the rods will slide back and forth.once the notches are lined up you can shift your tranny.the bushing needs replacing in the shifter on the transfer case.look on EBAY and you will find them.