Trouble shifting into 4-Hi

Hello, I bought my truck back in April. It's a 1994 K1500, with the 4.3L and automatic transmission. It has about 150,000 miles on it, but looks and
runs great. I tested shifting into 4-Hi and 4-Low back at that time. Since then, I haven't had a need to use it, so I don't know when my problem started.
I've only just discoverd it now because my truck has been on vacation. It got hit a few months back while parked in front of my house. While it was in the shop, I was concerned about matching the 10 year old paint, so I decided to have the whole thing repainted, and 4.10 gears put in while they were at it. After a lengthy spell in the shop, I finally got my truck back today.
I decided to test the four wheel drive, and make sure it all worked before we get any serious snow here. It's a good thing I did. 4-Low works just fine, as does 2-Hi. But... 4-Hi does not want to cooperate.
Since 4-Low is engaging just fine, and lighting up the light by the floor shifter, is it safe to assume that the problem is in the transfer case, and not in the front end? I can get 4-Hi to engage sometimes, If I leave the truck in neutral, and give the handle a good yank from 4-Low all the way into 4-Hi. This has only worked a few times.
If I shift from 2-Hi to 4-Hi while the truck is moving, I feel the handle "click" into place, but the indicator light doesn't light up. Once in 4-hi, If I pull the handle back harder, or try and push it a little bit sideways, I can feel/hear gears starting to grind a bit, as if it isn't locking all the way back into place.
The truck had a 3" body lift on it when I bought it, so tomorrow I am going to take the plastic cover off and make sure that the handle isn't hitting on anything and keeping it from being able to completely lock all the way back. I doubt this is it though, because the body lift looks to have been on this truck for quite some time.
Does anyone have any suggestions of other things I can do to try and narrow down the possibilites and pinpoint what is wrong?
-NW
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OK... So I took the cover off, and it turns out that the handle was hitting the end of the guide track. So, I took the handle and put the end of it in a vice. Heated it with a torch, and bent it a few degrees. Now, the range of motion is not restricted and it seems to shift into 4-hi as it should.
I can't imagine that the guy who owned the truck before me would have never used 4-hi.
Does the fact that the transfer case is getting picky about handle position in 4-hi mean that the shift fork, or some other part is going to need replaced soon? Or do transfer cases tend to be "all or nothing", and not exhibit symptoms before they fail?
-NW
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