4wd problem with 1996 Rodeo

Here is a good one. I noticed that my Isuzu Rodeo was not going into 4wd. The vacuum shift mechanism was working, but no go. When I pulled the shift mechanism out and looked up into the axle,I see a 1/2 in separation between the gear on the long side axel, and the gear that engages the driver's side outer axle. The sleeve which is used to connect the two together is unable to engage the gear on the driver's side axle. I take it to a shop and they see the same thing I did and conclude that a spacer is missing. They pull the front end apart, and the spacer is there! I ordered a replacement and everything. So we are looking at the system and trying to figure out what is going on. Everything is there, but all indications are that the spacer is about 7 mm too short (and the new replacement space is the same length!). It looks like I've never had 4wd! Has anyone else run into this nightmare? I have a 1996 Rodeo with (supposedly) SOTF.

Update: the shop found a 4 mm spacer that fit perfectly on the shaft. It just may be enough to do the trick and keep the gear where it can be engaged (at least it looked good on the bench). This problem continues to bug me because it looks like a design problem and I wonder how many other 1996 owners have Isuzu 4wds like mine. I'm racking my brain to see if I am missing something (ie, could the bearing have slid on the axel shaft?). Has anyone torn one of these apart? Is there supposed to be a space between the bearing and the c-clip that retains the spacer? Has anyone pulled their vacuum actuator off and inspected their gears in the axle?

Final conclusion: My final conclusion is that after 90,000 miles, the continuous turning of the axles must have caused the bearings to shift on the axle. The location of the c-clip is just a bad design. It should have been located closer to the bearing and act as both a bearing retainer and a spacer locator. The second 4 mm spacer installed by the shop should help if this ever happens again. I also put on a pair of superwinch manual locking hubs to make sure it does not happen again. In the end SOTF is just plane not as robust as manual hubs and one piece axles. Thank goodness I do not have this setup on my 86 CJ7!

My 4x4 was not engageing and I put manual hubs too. When I removed the vacuum actuator, I just moved the connector from one side to the other and did the same with the C clamp on the actuator. I connected the vacuum hose on the upper part of the actuator, so the C clamp wont ever desengage.