I do not think that they ever put auto hubs in conjunction with a manual lever shifter on the T-case controls (which is what it sounds like you have, since you used the word lever, not knob or switch). That said, this pretty much eliminates the option of it being a vacuum issue, since vacuum only effects auto hubs.
The manual lever is just that, an actual mechanical link to the T-case shifting linkage, so if you pull the lever, and the light comes on, I'll bet dollars to donuts that the front driveshaft and axles are spinning. However,your truck does not have automatic hubs, they are manual. You must get out of the truck, and manually engage each hub (one on each side) by turning the selector on the end of the hub Clockwise until it clicks or stops turning. Once you are finished using 4x4, it is best to unlock them as soon as it is convenient (and safe) by turning the selector back counterclockwise until it stops.
