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Key on, flat ground
Brake on HARD
N in main gearbox
Turn lever to N PRESS AND TURN FURTHER TO WHITE LINE
Hold 5 seconds until warning comes up on dash and big red N indicator lighrs.
Release and allow selrctor to return to N position

I think you missed the step in caps above.
 

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Then move the car a bit. Does it engage 4H or 4LL? When was the last time the transfer case got shifted? They can get a bit sticky, go find a road with loose shingle and give it a few shifts from 4H to 4HL to make sure the transfer motor is working properly

Mine has its moments and gets sticky and won't find neutral, popping it into gear and moving it a couple of feet usually helps. If there's any sort of pressure on the transfer case it can be a pita to get to dis engage. You could jack one wheel off the ground and try again, but the shingle road tricks worked for me numerous times.
 

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I agree. Happened to me once. Now switch it once a month to make sure it hasnt frozen. Son has similar probs with his Prado.
 
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