Did you put in the coupler that goes into the transfercase adapter? I forgot that once. :?
Let us know how it goes.If he starts the truck and puts it in gear and it doesn't move, does it make nasty noises when he tries to put it back in park. The nasty noises would be the parking pawl trying to engage while the tranny is still spinning. This would let you know if the tranny is actually moving. If so you can look at the shift linkage on the 203 it can sometimes be a big pain in the ass. Try removing the linkage and shifting the transfer case by hand. If the linkage is not adjusted right the transfer case may not be going all the way into gear. Shifting it by hand from underneath will make sure it as all the way in gear. Try it and let me know what you find out.