PROBLEM! 2WD does not work!

I have a 5 speed manual cherokee sport. 2001. When my transfer case selector is in 2wd position, it for some reason does not engage the transmission. I can put the clutch in, shift into gear, and let the clutch out, and it doesnt stall. The reason the problem is not the clutch is because the jeep works perfectly in 4wd both high and low. Does anybody know what could be wrong? it is almost like the transfer case is just slipping or not engaging the transmission. Any help would be greatly appreciated. Thanks!

It sounds like you don't have rear wheel drive, and when you're in '4x4', you're running in front wheel drive.

Check the rear driveshaft, rear pinion, rear output on the t-case.

could also be linkage problem, making 2wd actually neutral in the t-case

thanks alot, will check it out