Sir, you are stuck in low range. Climb underneath it ans see what is up with your linkage.
X2
me thinks that maybe your linkage for Hi-Low is not working. As stated previously by Cruiseroutfitter, the vaccum operated piece shoud, have NO control over Hi-Low, it really should just couple your front axles together giving you 4wd (if I'm picturing it corectly,).
Or is it different from say a Wrangler YJ or an old 80's SFA Suburban (the two Vacum operated 4wd engagement's I'm intimatly familliar with

.We saw alot of those frozen/siezed in the Parking lot at Timberline lodge when we had deep snow, not the best 4wd engagement systems IMO. I like my Manual hubs and lever on the floor...) in that it controls a "collar" of sorts that connects the short side of the axle? As in basicly the front shaft is always sp[inning and being that it's an open diff will automaticly just send power down that "de-coupled" shaft untill you pull it into 4wd...
Eitther way mate. If you can only do 40 @ 4000rpm you're most definatly stuck in 4LO. As CO suggested you should have someone actuate all of the various controls while you look to see if they are working (well those you can see easily) you can also put the truck up on blocks and get the wheels free then run it and see if you can fiddle with ther lever/cable and get it into 2/4 HI...
Sounds like an annoying problem and really I'd be worries that if you've been DDing this rig you've cooked your T-Case gear-oil. THat T-case isn't used to being run around in those low range gears for long periods of time. Does anyone know what besides overheating could happen if indeed he is stuck in 4LO and has been driving it that way???
Cheers
Dave