I feel your pain. I did mine about 1 month ago and ran into the same problem.
Mine was caused by multiple problems and my being stupid at the time.
1. Order some new Mode fork pads and shift fork pads from the stealership. If these are a bit warn it will cause the Mode fork to twist and hit the shift selector. Also get the 2 bushings for the shift rail.
2. Make sure your in Low range. Now where the shift rail protrudes from the back of the case measure 1" and cut off the rest. AND I DO MEAN NOT OVER 1" it was very sensitive to this measurement. Part of me being stupid I didn't cut enough the first time.
I don't have a vacuum disconnect axle so I didn't care about the switch
4. Make sure the beveled teeth of the synchronizer are facing the back of the case.
3. DON'T FORGET THE SPRING. Ask me how I know this.....
4. Also the TC will not shift right until the yoke nut is torqued down to 110 ft-lbs
On a side note, my tc was hard to shift the first time while wheeling, but after that it shifts as smooth as butter.
If you have any problems just PM me and I will see if I can help.
_____________________________________________________________
90 XJ RE5.5 lift Dana 44 rear with 4.88's locked front and rear. Rolling on 35 Xterrains with lots of trimming.
Visit us @
www.pa-wheeling.com