1999 Denali Front Diff Problems

[destroyer1362]

I have only had my truck about a week before I noticed this problem. It was in auto 4x4 when I drove it off the gravel car lot. There is a concrete entrance before I get to the road. When I was stopped on the entrance way I heard and felt a small pop/clunk I just thought it was the auto 4x4 going back to 2wd mode. I put it in 2wd until I got home, then I put it in 4hi to go down my gravel driveway. After stopping and still in drive I heard the pop/clunk again. Then the other day I discovered that my truck was not going into 4x4. The correct lights on the push button 4x4 light up when I push the buttons and I am not getting the service 4x4 light. So I put it up on jack stands and checked the t-case, the front shaft locks in and turns as it should. So then I pulled out checked the actuator in the front diff, no problem here either it extends all of the way when I engage 4x4. Then I checked the half shafts and the cv's are fine. So I went back to the diff. I pulled the actuator out and used a screwdriver to push in the pin that engages the front wheels while I had a buddy of mine spin the front wheels by hand. Couldn't get it to lock in. What I did notice was that the pin I was pushing in on would only move about 1/2 an inch before it would stop. Does any one know how far this pin is suppose to move? or what is wrong with my front diff? and fyi the 4x4 is all electrically operated, it does not have the vac operated shifter. Sorry this post is so long, I just wanted to give all of the details.