With the engine off but ignition on you are able to shift hi/lo. Can you hear the shift motor activate?
Because the dash lights indicate the shift has been successful I fear you have a T/C internal problem.
The shift motor and mode sensor are one assembly, I suppose its possible that spline has striped out of the shift motor.
Here is a link to the service manual
https://www.dropbox.com/s/tub5m6ked6...e%20manual.PDF