I'm going against the crowd today and say its not internal to the transfer case. If it was a shift fork, you would not be able to get the front axle to engage in 4 Low either. It may even hang up between gears, or in neutral (had that happen to me on an older one).
I'm not sure about this but I believe GM and Dodge both use New Process transfer cases. My experience with the Autotrack NP241 in my GM was an education. Lets say the root problem was home mechanic (me) error, that led to many failed repairs by proffessional mechanics, and a final solution performed by the said home mechanic (me, again).
A failed encoder motor that shifts the case, will partially work and make some whirring and banging to prove it. And for some reason, 4 Lo in the rotation is easier to manipulate than 4 Hi. With a failed motor, I could get 4 Lo to work, and no 4 Hi or Auto (Exclusive to GM, and fairly worthless unless the wife is driving).
The clue to this the indicator light, controled by the TCCM (TransferCase Control Module). I bet the indicator lights up for 2wd and 4 Lo, but not 4Hi.
My $2 bet is on the encoder motor. Easy repair, but the part is a bit spendy.