Transfer case stuck in neutral?
the shift linkage for your tcase could have frozen up, especially since you say it wont go up.
Should be an easy fix, if thats all it is. Just get under the truck find the linkage on the tcase and spray away with wd40 or something similar. Wait a bit and then try to shift it. Make sure you are doing it according to the manual. I have a manual transmission on my D1 and i dont know the sequence for an auto.
First but gone: 91 3 door Disco "White Rhino"
77 Series III 88 ex MoD "Shongololo"
Gone and I miss her: 97 D1 5 speed
04 DII
08 D3 (LR3)