The diff-lock is to be engaged with the knob pulled out.  It sounds like
someone did some repairs or whatever to the transmission and when they put
everything back together switched the blue and white hoses.  Switching them
back will correct the knob issue.

The other two knob positions are for a locking front diff and center diff, not
avaiable in the USA or Canada if I'm not mistaken.  All the wiring is in place
for these two, just not the actual diffs.

SFC Brad Spear
'72 Westy
'87 Syncro GL

In a message dated 98-12-01 10:53:44 EST, joefried@JAVANET.COM writes:

<< November 1st I purchased a Vanagon Syncro and love it. My question is
 with the differential lock. In its normal unlocked position the "switch"
 is pulled out. When pushed in the differential lock is engaged, (this is
 obvious due to the feel of the vehicle when driven and the green light
 which comes on). My questions are: Is the switch supposed to be engaged
 when pulled out?, thus making my switch work in reverse. This seems
 logical to me so as to not engaging switch by mistake-I also drive
 around my nieces and have a young son myself, which makes me worried
 they may engage it. Also there are 3 green lights but only one (the
 rear) comes on. Are the other two for syncros with other options such
 as: Front differential lock or disengaging rear wheels? It has the
 recesses in the dash for two other switches but only the one switch
 exists. Any answers to clear up this mystery to me would be appreciated.
 By the way this site is a fabulous resource to which I log onto daily.
 Thanks in advance.
  >>