Issue I can't figure out is that when the diff loc lever is to the right I can shift between high and low no issue. When its to the left it will not shift between high and low. The diff loc is not stuck and can be shifted by hand (tranny and t-case is still currently out), any thoughts?

 

Have you tried rotating the transfer case output shafts and then (or while) trying to shift it?

 

Cant say that i often shift from hi to lo while CDL locked but possibly thats just the way they are and you dont have an issue.

 

now that you mention it that could very well be...