As already said, left-right is the CDL, light is on for that, not low range.
Move lever left and right a few times to free it up a bit more. 
You can move into CDL locked and unlocked whilst driving(up to 100 k/h I think). 
Just don't shift whilst driving and spinning any wheel! (an unlikely situation, but good to be aware of it).
Tdi can be a great little motor. 
In terms of gauges, I'd say probably more important than EGT and turbo gauge is water/engine temp gauge.
Coolant temp gauge can be handy to have, but it only works at a preset temp.
I think it's better to know that the engine is heating up, given certain conditions(eg. towing/loaded ... long uphill climb, just a flat out hot day out and nothing you can do about it! 
)
Reason I say that is because mine doesn't run hot, or heat up ever! .. except under specific situations.
No matter how hot outside(I've tested up to 44°C), my max coolant temps, up hill or down, or free wheeling or whatever) .. usually about 88°C max, generally 80-85.
But I recently had an issue when I ran air con, in ambient over about 35-ish degrees, I'd see coolant temps in the 110 range if not kept in check.
That is, not watching the temp gauge like a hawk, but over say a 5min period, a quick glance would confirm coolant temps rising. More so uphill. EGT would always rise at the same time, in fact I think higher EGT would be causing the coolant temp rise.
Anyhow, sorted it out to a reasonable situation now(made a scoop) but something to be aware of. 
The dash gauge is totally useless, up to about 117-120°C coolant temp. 
Make sure all your hoses are in good nik .. triple check the two hoses up top, back of engine for the heater matrix. On mine, one was leaning on the head, at the corner, hot aluminium vs rubber hose, aluminium always wins .. burned a small mark that WAS gong to become a holed heater hose. disaster averted. 
I'd say that 235/86's on a D1 on a standard Tdi, may be a bit too tall(gearing). You may want to think about defender transfer case gearing at the same time too. 
Are you manual or auto?
.. anyhow .. definitely move that high-low lever left-right a few times to help free up the CDL mechanism.
Note that sometimes it can take a short while after you've unlocked the CDL for it to unlock.
when I got mine, owner didn't know how it worked(or what it does), so hadn't used it for at least 5+ years. maybe more if previous owners before them never used it either.
ON first lock, it  took about 500m to turn on, much reversing .. etc to get it to come on. 
Then once it came on, it took longer to get it to come off. Gravel road, I'd say a bit more than a couple of klms, two shots one U turn. No snatchy feeling in the driveline when doing the u turn. So I think the actual diff turned unlocked, but maybe the light switch was a bit gummed up inside and slow to react switch plunger caused the light to stay on
Maybe .. dunno, has operated perfectly as expected since that road test before buying it!
				
			 
			
		 
			
				
			
			
				Arthur.
All these discos are giving me a heart attack!
'99 D1 300Tdi Auto ( now sold :( )
'03 D2 Td5 Auto
'03 D2a Td5 Auto
			
			
		 
	
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