The answers are in the posts between that one of yours and this one of mine (and I agree with most of them)... to summate...
your handbrake is not releasing due to a build up of sand or crud somewhere in there.
To remove it look on the front of its backing plate between the Transfer case and the plate on the passangers side there will be a small square drive turn that to loosen off the park brake after releasing the hand brake lever (chock the vehicle) then remove the rear prop shaft (14mm 3/8th inch drive swivel bar and ratchet is easiest) then undo the philips head screws to get the drum off wash the drum and the guts of the handbrake then give it a good going over with brake cleaner then reassemble.
to adjust the brake leave the rear prop shaft off and everything in nuetral then start re-adjusting the square drive as you turn the drum, once it just starts to grab the drum (you'll hear it scrape) back the adjuster off 1/4-1/2 turn or untill it stops dragging. Attach propshaft, lower vehicle go for a test drive.
use new nyloc nuts or loctite 242 or 243 on the propshaft mounting nuts and do them up to about 40nm.
once youve got it all cleaned out the low range shifting should return to normal...



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