I personally don't know, but my buddy just did this last weekend on his '78. I'll ask him. I won't be able to get back to you for a few days though, so if no one else has an answer for you, email me privately and I'll try and help you out.
Yes, there is a part time kit installed in the transfer case. What I did was shift to "HI-Lock" and disconnect the hubs. When I reached under and rotated the front drive shaft by hand the rear drive shaft would move. When the shifter was in "HI" the front driveshaft would rotate freely.
In addition to discovering this, I also discovered a butload (technical term) of play in the transfer case. has anyone rebuilt there NP203? What's involved? Does it consist of replacing EVERYTHING inside or just the chain? Can it be done with the case still in the truck?
http://www.southerngear.com $90 for the chain. While you got it appart put a new front seal in and yes it can be done without pulling it out of the truck.
Some slow in there is normal because of the way the part time kit works. It may not be fully hashed yet and have some good life in it.