Sounds like something to do with the linkages
Last weekend we had a problem with our disco, similar problem to yours, the transfer low range lever went all loose, but with ours the centre diff lock was fine it was just the low range..
So we pulled the console out and inspected it, the problam turned out to be inside the transfer.
We had to undo the 6 bolts that hold a cover/plate section to the top of the trans where the low range linkages enter the transfer case.
We soon found that a grub screw that secured an engaging fork onto a shaft had come loose allowing the fork to spin on the shaft without engaging lowrange...
With a bit of locktite we were away again
I would crawl under the car and get someone to operate the diff-lock lever and see what the linkages are doing, something might have simply come loose with abit of luck....
CHEERS TIM.


 
					
					 Defender 130 TD5 Diff Lock not working
 Defender 130 TD5 Diff Lock not working
		 
				
				
				
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