Newly Acquired '68 4x4, What's your assessment?

[Rotaxx]

This is a '68 SWB with a V8, 4 speed, divorced transfer case. 303605I'm done documenting the vehicle with photos and I need to get some expert opinions on a couple of issues. Photos are posted for info purposes, and also for entertainment.
First off - the cab VIN says it was originally a 2wd 6 cylinder, so it is probably very safe to say the cab was transplanted to this chassis at some point in it's life. Apparently the bed didn't survive the procedure. Since someone went through this much trouble I dare say anything else done to this truck shouldn't come as a surprise.
The motor is a small block Chevy, and low on the list of my concerns. I'm comfortable with SBC rebuilds, and in all actuality this one runs surprisingly well - even with the custom exhaust (but only on one side, the other header terminates with a cherry bomb pounded directly into the collector. Awesome.). See photo: Many issues here. I really like the green wire running right over the mouth of the carb (Apparently this particular model didn't come with an air cleaner). Linkage is several wraps of bailing wire. Solid. The phone wire in the background runs the heater fan. And yes - it actually is a phone wire. The carb has a Mercruiser tag, so it's entirely possible that there is a boat out there somewhere languishing without it's carb (or maybe even the whole damn motor - I haven't checked out the numbers yet to actually see what it is). There are tons of things wrong here, cut vacuum lines (including the timing line), wood holding up the battery, bare wires, melted wires, etc, the list goes on. Again, all of this needs to be addressed but I'm not too concerned about it at this moment. As a safety precaution i disconnect the battery.
My first major concern is the hubs. The lock in/out knobs spin all the way around. Sort of. I think the front axle is a Dana 44, and it has 9 leaf springs (and yes - that is a spark plug wire dangling beside the axle. Either a spare, or the truck was equipped with an ultra-rare V-9 at some point in it's life). The rear is a 12 bolt with 10 leaf springs (this truck will knock the fillings out of your mouth just going down the driveway). Note the driverside rear shock is extended a little more than the other. The truck does have a slight lean to it - but I'm not going to worry about the suspension until a little later. With 33's on it, there is nearly a foot of clearance to the fender. How much lift is that?
I'm not able to make the four wheel drive system work. The transfer case does shift to low range appropriately, but the fronts aren't engaging I don't think. I think the TC is a Rockwell T221. I need to do the brakes soon - drums all around. I'm replacing wheel cylinders, shoes, all the lines and drums if I need to. This would be a good time to fix the hubs. Any ideas on what's involved and how difficult it will be? That's probably enough for now - I could write volumes. My priorities right now are brakes, and getting the 4x4 system serviceable. Thanks for checking out my truck.