Answering your question about locking the CDL......
You can lock/unlock the CDL at any speed in any gear. however, you must be in neutral to shift between high and low range gears.

So, looking at the CDL shifter.... Right to left anytime, fore and aft only in neutral.

It's worth noting that your CDL won't engage if your vehicle is already in a position where one wheel is already spinning. Engage the CDL before wheel slippage occurs.

 

Possibly the plastic bushings in the linkage pins have worn out or are damaged... This may cause excess play in the linkage movement...

 

Thanks to everyone who commented on this post. My CDL got stuck in diff lock and i ended up pulling the entire shifter out, took it apart and cleaned it all. it was full of hardened reddish brown grease and was extremely dirty. Once i cleaned and regreased it, it works like it should. Thanks again.

Rob.