Chris replied:

Plexus, I used to have a 85 Saraha - same set-up as you. I never re-call having that problem but I always swiched on 4WD (i.e. 4H on the dash) before shifting the lever to 4L. The light stayed on when I shifted the lever. I never had a user manual with mine so I could be wrong but I would have thought the switch engages 4WD, and you need to do this before shifting to Low range. As with any 4WD you can't get to 4L without being in 4H first.

I look at it as the switch engages drive to the transfer case and the lever then lever allows you to select between High and Low range. So if there's no drive going to the transfer case in the first place then any selecting of rage isn't going to do anything.

Hope this helps,
Chris