4WD not working properly Stuck in 4lo will not shift out to 4 hi or 2 wheel drive

It's probably your transfer case. If not used very often, they tend to seize up. If used alot, may be in need of replacement or oil needs replacing. I believe they take about 1.5-2L of auto trans fluid. Check the fluid level first, by removing the fill plug (big plug at top) and sticking your baby finger in and bending it down. If it's full, the fluid level will be right at the bottom of the plug.
It it's not, try adding some until it starts to run out of the hole, then replace to the plug.
To change the fluid, remove the fill plug first, then the drain plug and let it drain. Replace the bottom plug, fill (like discribed above) then re-install the top plug.
Always remove filler plug (top) first, then drain plug (bottom) because they can be a real bugger to remove and if you remove the bottom one and can't remove the top plug, you're screwed.
Check and add fluid if necessary, then try to shift gears before going through all of the other stuff because low fluid level can cause your problem but check on the right type of fluid first. Adding the wrong fluid can cause expensive problems. A fluid change would be beneficial, especially if you off-road because you'll get water in the oil and it does damage after awhile.