HH,
That is correct, the one on the transfer case is a round tin looking cover, the cover can be removed, I think there's like 4 corner screws holding the cover in place and the guts can be removed (coil) and that will disable the interlock function. It is designed to prevent inadvertent hi to low shifts. As designed, you are required to have the tranny in N to be able to shift the transfer case from high to low or vice versa. With the solenoid disabled, that function is as well. The actual problem is most likely the neutral safety switch (I think that is what it is called) or sloppiness in the tranny linkages that is failing to allow the solenoid to function properly.

It looks like a small tuna can sitting on the top rear portion of the transfer case top side.

 

Thanks Danny Lee, I may look into that...

 

The closest diagram I've found is from the Electrical Repair section of the D1 Manual. It shows an interlock solenoid, but of more interest to me- it almost appears the linkage from the shifter out to auto tranny is concentric cable?? I'm thinking my seized motion of shifter is in this area somewhere. What is the function of the interlock solenoid? I thought it to prevent CDL shifting when not in Neutral Trans. position. Could this solenoid be acting up on my auto.tranny shifter? I believe from the manual this is accessed from the top by removing the consul?? I think I've found evidence the sunroof was leaking right over top of the shifter, while the Disco was on hiatus- good chance this promoted the seized mechanism. Wise words are appreciated.