4x4 not working

LOL, and this
jeep body bracket.jpg
 
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Look like you are missing the Torque Shaft Bracket and if it has a body lift and no Motor Mount Lift then you are also missing the relocation bracket
View attachment 151484
I think his shift rods are swapped at the torque shaft also. Several problems going on here. Probably easier to just purchase a cable shifter at this point.
 
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You should be able to shift the transfer case with the lever on the case. Don't spend money on a shifter until you get that worked out, you might need the money for other things...
 
How tall is your BL?
...And/ or do you have the skid plate off?

"A" is supposed to be in "B".
And I believe there should be a grommet/ bushing there, usually green.

tcshaft.jpeg
 
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You should be able to shift the transfer case with the lever on the case. Don't spend money on a shifter until you get that worked out, you might need the money for other things...
Yes, absolutely. Disconnect the linkage at the transfer case lever and make certain you have all four modes. You should feel a distinct detent in each mode.