Did you push down on the lever? You have to push down on the lever while pulling back once you get past 4H. When in low the lever will be all the way down toward the back and nearly horizontal. I believe you were correct having the truck in neutral (I don't have the automatic), so it sounds like you just needed to push down on the lever. I think you need to have your foot ont he brake too, but I'm not sure. This is one of the safeguards to keep you from accidentally putting the transfer case into neutral or low range. BTW, if you don't already know this, neutral on the transfer case releases all the drivelines. When they say neutral they really mean it! Make sure you have your foot on the brake when you shift through there!
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ChuckH
"Every morning when I wake up I know it's not going to get any better 'til I go back to sleep again!" Al Bundy