I have an 86 Toyota with a NP-203 in it and I have some questions about the shift pattern. I'm sure this thing has a part time kit in it because I jacked up one of the back wheels and it'd only try to pull off the jack when the shifter was in the forward two positions past nutral.
My question is this, what is the shift pattern when there's a part time kit installed? It seems like the two rear positions (H & H Loc) are 2WD and the two forward positions (L & L Loc) are 4wd which means I only have 4WD in low range which really sucks!
Also when I'm in 2WD (H or H Loc) there's a clunking noise and I can see the front driveshaft making a slight turn with each clunk. I have a huge hole in the floor over the trans that I need to cover so that's how I see the driveshaft.
A friend of mine says it just needs to have the linkage adjusted but I'm worried that it's more then that.:(

I was thinking about swapping out the T-case for a 208 or 241 but then I'd have to get the driveshafts changed again and that's really not an option at the moment. So please no "just swap in a 205, etc" posts, I need to fix what I got right now and worry about putting in something better way on down the road.:)

If it has a part time kit installed, then you should have 4wd in either of the original Lock Positions. The original shift pattern was L Lock, Low, N, High, H Lock. I would try adjusting the linkage. It might not be hitting fully in the High Lock position.

Four wheel should be in either of the lock (Hi-lock or Low-lock) positions with a part time conversion kit.
Sounds like your chain is streched, or some other internal problem.
Sorry. It sounds like you need to tear the 203 apart.