4wd stopped working on 04 tacoma

Already posted under 1st gen forum but didn't really get any helpful replies. Here's a short outline of what happened. I went to engage 4wd and felt really hard clunk, 4wd light went on. I kept driving and it was slippery out so coming around the corner realized I had no 4x4, light was still on. After I turned off the truck and started it again no light and no 4x4.

Today i spent good part of the day under the truck and here's where I am at.

1 - Started off with ADD actuator.
checked resistance between terminal 2&6 - it was good.
checked resistance between terminal 2 to gnd, then 6 to gnd, - didn't get anything
Applied 12v to 2 and GND to 6 - heard actuator and had continuity between 3&4
Swapped them around and still had continuity between 3&4 but according to FSM there shouldn't be.

2 - Tested Transfer Case actuator -
I quickly applied 12v & gnd to pins 1&2 just to see if motor was operational and it was.
I then measured resistance between 2&3 and it was serviceable
Tried inspecting operation of actuator as per FSM by applying 12v to 2 and GND to 3 and there was NO movement

I think I have 4x4 now by applying power to ADD directly and moving it to 4wd position.
My light is now flashing but when i press the switch to go back to 2wd nothing happends, i do not hear anything at all whenever truck is running or not

I am somewhat lost on how to troubleshoot this system, can anyone help?