I very recently had an issue with a replacement front diff and valve body replacement.
After installing the front diff and valve body the SVX would shift up to third on the lift, but under way lock into third.
Naturally first I checked the internal transmission wiring connections,
(they were good)
then I checked the transmission ground, good as well.
Swapped back to the original valve body, no differance.
Reinstalled the new valve body with the original solenoids,
same freeking thing.
By now the transmission had been in and out about four times, and the valve body about four times,
Dave!
What I finally found was a broken wire hidden in the loom that goes to the transmission control wires on the left/drivers side of the transmission.
The break in the wires was an old one, but untill I had the trans in and out it USED to have good conectivity.
Long story short, check the internal AND external wires next.