Id like to engage the 4th gear disengagement button cause it seems to engage and disengage on its own.

Hello. It seems the 'Overdrive' button in your gear lever is defective/malfunctioning. This will cause the overdrive solenoid not to engage/disengage due to lack of 'power'. Good luck and keep me informed; if you want to.

If this is a stick shift, bad engine mounts; misadjusted linkage; or bad syncro rings.

What is the fluid level in the clutch?

4th gear disengagement:

The 4th gear is engaged automatically after the transmission has shifted through 1st, 2nd and 3rd gears

at certain speeds and loads. By pressing in the button at the rear of the selector level, the 4th gear can be

disengaged, thus providing a three-speed transmission. As a reminder the

? light on the dashboard

glows. By pressing in the button again, the transmission reverts to four-speed operation and the

?
light shuts off.
This is straight out of the owner's handbook. What this indicates is that there may be a problem with the shift solenoid. On the highway, does is seem to rev high? Can you press the button on the shifter and have the light go out? let me know.

The vacuum is to keep the 4x4 disengaged, once vac is removed the IWE ( Integrated wheel end ) is engaged, so the front hubs are locked.

Block diagram from the F150, EXPY should be the same routing ( could be slightly different )


The f150 had a TSB for the IWE solenoid where water could get into the system, and cause the IWE to not be disengaged in 2WD ( slightly engaged, ratcheting the IWE gear ).
Right Click, Save As
http://my.voyager.net/~sscully/file_tsb06_08_15.pdf

Ok I see a manual transmission with a hydraulic clutch.
Get some fluid in that reservoir before you burn up the synchronizers.
Basically your clutch isnt disengaging because you are out of fluid. Next you need to find where the fluid is going. Likely the clutch slave cylinder is leaking and needs replaced. Pretty easy actually if you are handy with a wrench.

throw out bearing bad and maybe a shattered clutch

This is a longshot, I recall a Pontiac Fiero that had a similar problem. It turned out to be the TCC ( torque converter clutch ). which is part of the transmission. The TCC engages when in high gear ( 4th gear in your case ) . It is supposed to DISENGAGE when stepping on the brakes and slowing down. If it doesnt disengage, what you are experiencing occurs. Does it do it all the time or only when car reaches operating temperature ?.

There is a button on the side of the "shifter" knob that engages and disengages 4th gear.

The button with a "D" with a circle around is for engaging and disengaging overdrive. Your transmission typically will have 4 forward driving gears...by having overdrive disengaged your car will not go into the 4th gear. Disengaging overdrive should only be used when towing or traveling in mountainous terrain.