this is what the owners manual has to say about the transfer case, read it all then ask any questions you may have...........
The two speed transfer gearbox, is used to
select either the high or low range of gears
and, in addition, also controls the centre
differential (known as the ’DIFF LOCK’).
A shift interlock safety feature is fitted which
prevents any transfer box gear selection being
made unless the ignition is switched on and
the automatic gearbox selector is in the ’N’
(Neutral) position.

Use high range for all normal road driving and
also for off-road driving across dry, level
terrain.

Use low range gears when moving off from
rest when towing a heavy load, or in any
situation where low speed manoeuvring is
necessary, such as reversing a trailer or
negotiating a boulder strewn river bed; also
use low range for more extreme off-road
conditions where progress in high range
cannot be maintained.

Transfer box in neutral. In this position, drive
cannot be transmitted to the road wheels
regardless of the main gear selector position.
If, for any reason, the vehicle has to be towed
on four wheels, this neutral position MUST be
used (see ’Vehicle recovery’).

A constant, high pitched, audible warning
chime will sound whenever the vehicle starter
switch is turned on when the transfer gearbox
lever is in the ’neutral’ position. The warning
is intended to remind the driver that the
appropriate ’High’ or ’Low’ range gearing
should be engaged.

Use the ’unlocked’ position, for all normal
driving, and use the ’DIFF-LOCK’ position to
improve traction in extreme conditions, where
wheel grip could be lost, such as: wet grass,
mud, sand, ice or snow. Return to the
’unlocked’ position as soon as dry, firm
ground is reached.
DO NOT use the ’diff-lock’ unnecessarily!

There are two ways of operating the transfer
gearbox lever; the ’normal’ method -
recommended for inexperienced drivers - and
the ’advanced’ method for experienced
drivers.

With the vehicle stationary and the engine
running, depress the clutch and then move
the transfer gearbox lever fully forward (or
backwards) in TWO distinct but positive
moves - ’high to neutral’.... ’neutral to low’ (or
vice versa).
If there is resistance to the gear engaging, do
not force the lever. Instead, with the main
lever in gear, release the clutch momentarily
and then try again.

With the vehicle stationary and the engine
running, apply both foot brake and parking
brake and then move the automatic gearbox
selector to the ’N’ (neutral) position before
moving the transfer lever fully forward or
backwards to the required position.
If there is resistance to the gear engaging, do
not force the lever. Instead, with the engine
running, apply the foot brake and parking
brake, momentarily engage ’D’ on the main
gearbox then return it to the ’N’ position and
then try again.

With the vehicle slowing to a stop and
travelling NO FASTER THAN 3 mph (5 km/h),
depress the clutch and push the transfer lever
into neutral. Just before the road wheels stop
turning (and with the clutch still depressed)
push the transfer lever fully forward into ’L’
(low).

Changing from ’L’ (low) to ’H’ (high) can be
achieved without stopping the vehicle, as
follows:

Changing from ’H’ (high) to ’L’ (low) or vice
versa without stopping the vehicle can be
achieved as follows:
Reduce (or increase) the speed of the vehicle
to 5 mph (8 km/h) and release the accelerator.
Select ’N’ with the main gear selector and
move the transfer lever quickly to the required
’H’ or ’L’ position. Finally, reselect ’D’ with the
main gear selector and continue driving as
normal.

Unlike many four wheel drive vehicles, all
Land Rover vehicles have permanent four
wheel drive. This is achieved by the inclusion
of a lockable differential between the front and
rear drive shafts. With the differential locked,
the drive shafts to front and rear axles are (in
effect) joined together causing both axles to
rotate at the same speed. This is a normal
feature with all four wheel drive vehicles and
enhances traction on difficult off-road
surfaces. However, with the differential
unlocked, the different running requirements
of the two axles can be accommodated,
thereby enabling Land Rover vehicles to
operate permanently in four wheel drive for
both road AND off-road use.

The diff lock can be engaged or disengaged
either with the vehicle stationary, or when
driving at any road speed, and without
depressing the clutch. However, with the
vehicle in motion it is ESSENTIAL to be
travelling on firm ground, in a straight line,
and without wheel slip.

Move the transfer gear lever to the left - from
either ’H’ (high) or ’L’ (low) position (the
warning light on the instrument panel will
illuminate).

Move the transfer gear lever to the right - to
either ’H’ (high) or ’L’ (low) position as
required; when the diff lock disengages the
warning light will extinguish.

As a general rule, the differential should only
be locked in order to drive on loose and
slippery surfaces. ALWAYS unlock the
differential for normal road driving or as soon
as a hard grippy surface is reached whether
high or low gears are selected.