I know I have seen this question asked a couple of times but don't think I ever saw an answer, so I thought I would share this. I was messing around tonight and shifted into 4LO to see how it would shift and handle (I was thinking of doing a truck pull and have never put the truck in 4LO). I must have shifted the t-case to many times and put it in lockout because it wouldn't let me shift out of 4LO. This will not allow you to shift it for up to 3 min according to the manual. I got the manual out and started reading and came across how to put it in neutral as well. Here are the steps:
1. Start the truck or turn the key to RUN
2. Set the park brake
3. Put the transmission in Neutral
4. Hold the 2HI ad 4LO buttons at the same time for aproximately 10 seconds (The red neutral light will come on when it's in neutral)
5. Shift the transmission into Reverse for 1 second
6. Shift the transmission into Drive for 1 second
7. Shift the transmission into Park
Now your transfer case should be in neutral. To Shift out of neutral follow these steps:
1. Set the park brake if not already set
2. Shift the transmission into Neutral
3. Push 2HI, 4HI, or 4LO and wait for the light to stop blinking
4. Shift the transmission into park
5. Release the parking brake
Now you should be ready to go again.