You can address the 4wd shifter when you remove the trans/tcase. It Depends on how obsessed you are. :) The folks on this site can help walk you through a clutch replacement. It's a heavy job.
Welcome aboard. 1st see if the 4wd shifter is not in neutral or inbetween gears. If the clutch master and slave cylder are working properly, then you mostly likely need a clutch. A clutch can smoke when slipping.