Cool, there's a couple more things it could be but I'd definitely start there because of your symptoms and move to the next thing through process of elimination...

It's a good idea to get some penetration oil and grease on that push rod to either free it up or keep it moving anyway

The other thing to check would be the function of the vacuum solenoids on the firewall behind the battery... The one with the pink line is disengage... Check for proper function, "click"... And make sure you didn't melt the pink line on the manifold...

I'm guessing fuse #23 is good? Top right in the fuse panel...

 

^ Yup it was the actuator linkage thing that was the problem.
I got the cover off, and the linkage was obviously in the "engaged" position, and it was stuck there. I was able to use a screw driver to pry the linkage over towards the drivers side to disengage. After that I sprayed all the moving parts with brake parts cleaner, then with a wd-40 type lubricant. Had someone start the truck and put in and out of 4x4 as I watched the actuator and linkage move. Everything seemed to move freely and smoothly.
And of course now I can rotate the front driveshaft by hand when in 2x4, so no more engaged front drive shaft while driving down the road

Thanks for the help, A7X, I probably would be out buying new parts trying to fix it, but all it took was some lube!

Also fixed my "door ajar" issue thanks to some spray lubricant. That has been a common issue since Iv owned the truck.

I would also encourage everyone, (at least 97-03 4x4 owners)to check out their front driveshaft sometime to make sure you can rotate it by hand in 2x4, as I would have never known unless I had checked. The truck still drove and sounded normal, and the 4x4 worked fine.