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put it in 4 unlock high or low and have the hubs unlocked. if the truck moves you have the part time kit if just the front drive shaft moves you dont.
The transfer case only controls the front end, has nothing to do with the rear, if your transmission is in gear your rear tires will spin, for awhile chevy (and others) thought all wheel drive would be good on trucks, so the 203 turned your truck into all wheel drive. It sucked on gas mileage, so everyone put in conversion kits so to take it from all wheel drive back to 2wd with the option of 4wd.