I had almost identical problems with my '97 sohc with 110k miles on it. I was a good ways from home and tried to drive it a little further finally managing to get it into a safe place. It seems to be stuck in 4wd low now. No lights on the dash or anything, and the 4wd switch is in the auto position, but from the feel of it its in 4wd low.
Aside from replacing the transfer case, is there any way to for the transfer case into 2wd and make it stay there? Any chance of attaching 12V to the motor, moving it to the 2wd position, then doing the switch installation procedure for the dash switch as outlined in another post in order to make it stay in 2wd? For the time being, I'm just looking for a cheap way to make the car driveable again as I won't need the 4wd for some time now. Has anyone tried this approach, or has mechanical damage already been done to the transfer case such that it won't stay in 2wd regardless? Thanks for any help and input guys.