I will try to detail the test and adjustment (please excuse the errors it has been 20+ years since I did this last...)
Place truck on a reasonably level place, chock rears.
Engine should not be running for this test.
Jack up a front wheel, stay clear just in case there is some wind-up in the driveline.
With transmission selector in forward position (level, hilly, high or low, does not matter) turn front wheel. With transmission in ANY forward position, tire should rotate freely forward but lock going backward.
Repeat with transmission selector in high or low reverse, wheel should rotate backward but lock going forward.
Now the memory part............
Best I recall, the transfer front drive selector is pulled by the shift selector bell crank. It has a clevice and pin end attachment. Rmove the pin, free the jam nut and adjust the rod to a shorter length. (Please not that this may be reversed and need to lengthen...) With the shift rod freed, and the wheel still jacked up, verification of operation of the drive clutch is easy, just move it from front to rear and confirm engagement. (BE SURE APPROPRATE SUPPORT IS UNDER THE FRONT AXLE). Final adjustment is to split the distance the selsctor rod moves from the center position and engages with the selsctor shaft in the transfer. Be sure all shifter pins are in place and not excessively worn.
Good luck, let us know.