satoh beaver 4x4 wont engage?

hey there i just bought a s-370D satoh or mitsubishi tractor, its 4wd, and for some reason i went to put it in 4wd and nothing happens, the arm feels firm like its engaging but front tires wont spin. could it be internal of the tranny or front axle? also ihave tried ajusting the clutch but it still likes to grind going in to gear but the clutch holds pressure and doesnt slip?any info would be great. thanks
 

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