I'm not 100% certain oln a D1, perhaps others could comment. My gut feeling would be that it wasn't fully engaged in low. Don't take this as an insult,,, the transfer cases can 'stick' if not engaged for long period of time. This also happens w/ the CLD. It could be a blown solenoid on the t-case, but in this case you would clearly not be able to engage low range,, ie: you would know you were not fully engaged. Did your 'check engine' light come on, or just the audible alarm?