[Stocker]

Residual component drag can allow the front driveshaft to rotate in 2WD with the hubs unlocked, but it will rotate at a much slower rate then if the hubs were locked or if the t-case is in 4WD. Used to notice it a lot with the old Ford highboys when I was kid.

But if it's rotating fast (as though in 4WD) then there's a problem. With the hubs in the 'free' position, jack up one front corner and see if you can freely rotate the tire by hand. If you can't, put the t-case in neutral and try again. If the tire rotates now and the front DS does also, the hub is locked up and may be bad. Try this on the other side also.