The front driveshaft is bolted to the transfer case with four bolts, don't cut that rubber boot which only covers the driveshaft's slip-joint. You'll need to drop the transfer case skidplate to gain adequate access to those four bolts.
Are you absolutely 100% certain the transfer case shift linkage has not simply slipped out of adjustment? I would get underneath and while someone else shifts the lever, note how the linkage works. Then you'll see how it is held in adjustment by a 1/2" hex head bolt that holds the shift rod in position. That bolt can loosen and allow the shift rod to pull out & completely out of adjustment.
While watching which way everything moves while someone else pushes the shift lever towards 2wd, note which way the lever on the transfer case itself goes for 2wd that the rod connects to. Then, after loosening that bolt so you can do the next step, use pliers on the lever (not the rod) that is on the side of the transfer case itself to see if you can't shift it manually all the way into 2wd. It's somewhat stiff & notchy between 2wd, 4Hi, N, and 4Lo but you can shift the transfer case via that lever with pliers to insure it's fully into any of those positions. See if you can get it into 2wd with the pliers and if you can, just re-tighten that bolt so the lever on top can fully engage 2wd the next time.
Here's a pic of the linkage and you'll see that bolt I'm talking about that is circled in red. When that bolt slips & lets the rod slip, the whole thing goes out of adjustment.