UKXJ

Actually, for all we know, the PO disconnected the drive shaft 'cos the amber light was on.

As exasemech suggested, pay no heed to those warning lights: they may, or may not, come on - or go off - when they should &, based on my experience, the chances of having both that work at, never mind, when they should is zero.

There have been many posts about the the shenanigans involved in getting out of part-time 4WD. & particularly low, blipping the throttle, shunting (just a couple of feet) back & forth, ideally on a loose surface, but these have been to deal with the occasional reluctance to disengage (I've had to engage in it myself a couple of times) rather than a permanent situation - but all these things are worth a try.

Not sure that OP's driven it all all, never mind in PT4WD but as for the PO