If you were in neutral with the transfer case, you wouldn't get any movement from the vehicle when in gear. Be careful when shifting the trans and Tcase. If the Tcase is in neutral, and you put the trans in drive, do not put the trans back into park until you shut the engine off. You could easily break the parking pawl doing that. The J shifter has proven to be problematic, not being able to find neutral in not surprising. Just be mindful when shifting it.
Mark