sdhaze, I own an 89' 302 bronco with the push button 4x4/w autolock hubs. If yours works its a good thing, ask around and find out how (or use search) to care for the auto-hubs. Your button on the dash goes through a unit called the Electronic Shift Control Module (located under the passenger side kick panel, its a black box), then through to your shift control on the transfer case. I found this all out here while asking and searching, because I have the same type system you have, however, i'm in the middle of troubleshooting mine.
Hope this has helped.