Well I found the issue....I think. Now hopefully someone can tell me what to do to fix it....
I drained the oil this afternoon and filled the TC and OD with solvent. I then took my 16 year old daughter around teaching her to drive stick. I didn't try to shift the OD....just drove it around slowly....first in low transfer and then in high. After about 15 minutes I dropped her off at the house and took it out for a few quick minutes. On the last straight stretch before the house I decided to try and shift from Lo to Hi on the OD......bad mistake. I couldn't get it in to Hi and then couldn't get it back in Lo. This time it was different though, because no matter what I did I couldn't get it to grind. It just wouldn't do anything. Luckily I live in a small farming town and a local farmer pulled up behind me after less than a minute and asked if I needed a tow. He got me to the front of the shop and I used my tractor to gently push the FJ40 inside.
After getting it up on jack stands I drained the OD. The fluid looked fine. I could move the shift linkage easily back and forth, but it didn't feel like it was "engaging" into either Hi or Lo. Soooo I made the decision to pull the bottom to see how bad things were. I removed the 6 bolts and lightly tapped on the wings of the lower section and it easily came loose. Nervously I lowered it to the floor, expecting to see gear teeth and metal shavings, but to my surprise the insides of the OD are perfect from what I can tell. All the gear teeth look great and the synchro's look perfect too. I don't see any damage whatsoever....no corrosion or rust either.
With no visible damage, I started trying to figure out why it isn't working. The shift fork was obviously in between Hi and Lo so I tried shifting the outer linkage. Surprisingly, I could easily move the shift linkage while laying underneath the vehicle, but the shift fork wasn't moving at all. I took a large screwdriver and moved the shift fork back and fourth from Hi to Lo and it DEFINITELY definitely snaps into each range. I could see the shaft from the outer linkage move but it wouldn't do anything to the shift fork. At that point, I think I realized what is going on. I'm attaching a couple pictures, but I believe the problem is the roll pin that attached the outside shift shaft to the shift fork has come out of the hole. You'll see it in the picture. Now here's the big question.....is there ANY way I can fix that without totally removing the OD??
Anyone seen this problem before? I mean the original owner never had an issue with it but after it sits for 20+ years the pin dislodges?? Seems crazy, but I guess I should be happy that the entire insides of the OD are destroyed/corroded.