i am guessing at this, (pretty sure tho) others feel free to chime in and correct as necessary)
bigkat
if you have the 203 transfer case, i think that was for full time 4x4. but you have hubs, which means a conversion kit may have been put on. i am guessing at this. the full time 4x4 is exactly that, you can't select 2wd, always in 4x4. the conversion kit allows you to convert your full time 4x4 to a part time 4x4, so you are able to select 2wd, as well as 4x4. there are also high and low ranges in 4x4 (the hi, lo, hi loc, lo loc positions)
on the road, you should have your truck in the "hi" range. shift your transfer case into hi, should drive just fine.