It's amazing, I live in Patagonia, South Argentina, and I do 4x4 tours round the region as an afficionate. I bought this pick up as a tough yet low repair price pick up.
I had the same problem short ago, and at first I could solve it by disconecting the battery and retrying. It seems like the computer tries to hook the 4x4 3 times (you can hear it), and if it fails all 3 times it won't try again, it will just blink on the panel but don't even try to move the electric engine that engages the 4x4.
So when you unplug the battery, the computers resets itself and tries to hook the 4x4 system again. You do it over and over while in real slow motion (even slower than in first gear) until it hooks finally, and once it does, for some time you'll be able to unhook and hook it again normally.
And for the next one, dont let it fail 3 times. You hear it, and if after the second try it doesn't engage the 4wd, you can set it back to 4x2 and retry a few seconds later. That's easier then unpluging the battery.
In the end, it will fail permanently, and you'll have to replace the vacuum hob. This is just a tip to get you on the move for the moment.
Finally, never do it on pavement or other well traction ground, or at least if you do so, don't ever turn direction 'cause both wheels run always at same speed. It doesn't work like rear ones.
Best luck.
Pablo.