I've used the four-low in my KJ, although it's never pooped out. However, in my TJ, it does pop-out under stress. On TJ's, it usually happens when lifted and is rare on stock ones, as the linkage needs to be adjusted. I've gotten under my TJ and I can see where the handle connects to the transfer case, and I also have a write up on how to adjust it, but I haven't taken that on yet.
Anyway on the KJ, I pulled the page below from a 2003 Service Manual. You might get under it and check and see if the cable is tight. Sounds like it needs adjusting too. I assume that you are under warranty, so you might have the dealer fix it, as it should not pop out.
Hope this helps, and let us know.
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I'll also add, that on a TJ, I was told to have someone get inside and move it in and out of four-low while you are looking at it from underneath (that is if you can see the where the cable connects... I can see it on a TJ). But of course, use all caution and have the engine off, emergency brake on, etc.! This is just for educational purposes... LOL
And welcome, btw with your 65th!