Re: 4WD disengages on 89 Bronco
Here's a quick look into your transfer case. In 2WD, power flow is into the Input shaft, through the Planetary gearset (which is not allowed to rotate, effectively locking it to the Output shaft), through the Output shaft and out the back of the case.
In 4HI, all the above is the same. Additionally, a shifter fork locks a sprocket onto the rear Output shaft. This sprocket was previously stopped in 2WD mode, if the front wheel hubs were unlocked. The locked sprocket now transmits power through a roller chain to a sprocket that is attached to the Front Output shaft, which powers out through the front of the case to the front differential.
In 4LO, all of the above is true, except: A different shifter fork moved a lockup on the Planetary gearset to allow it to rotate internally. This then takes the Input shaft speed, divides it by 2.69, and sends it to the Output shaft.
I suspect that your Planetary gearset lockup is ending up in-between states. That is, not solidly in 2HI/4HI, and not all the way to 4LO.
Moving these shifter forks is an electric motor (looks like a power window motor) on the outside back of the case. It has a gear reduction unit on it. The motor has no idea how far to turn forward or backward. So there's electrical limit switches there to sense how far the mechanical parts have moved, and send back to the transfer case controller open or closed contacts. The controller stops the motor when it see's the right switches open or close. It also lights the dash and button indicators (I wonder what your lights show when you're stuck in-between).
The motor order for modes is: 2WD - 4HI - 4LO.
I suspect that your motor is turning a bit too far for 4HI, and not far enough for 4LO, as far as the Planetary shift fork is concerned. The Planetary shift in - out usually makes a crunch. Could be the switches down there. Or maybe they got a bit whacked out of adjustment.
I guess there's some possibility that the cam on the motor shaft in the case, or Planetary shifter fork is bummed up, but I sort'a doubt it, as your 2WD mode is fine.
That's my guess, Joe.