Do a search to verify but I think the fail safe position for the shift-on-the-fly (SOTF) unit is 4wd. For example if you lose vacuum to one of the SOTF solenoids on the front axle you stay in 4wd. You might check the SOTF unit for a broken or disconnected vacuum line. That or check the solenoids themselves. Again a search should pull up the details something like- +sotf +solenoids +vacuum. Be sure to add the +s.