Here is a picture showing the position sensor plunger on the correct side of the thin disc.

If your sensor was installed without removing the differential, it is probably on the other side of the plate. This can prevent the locker from disengaging.

 

That is exactly what happened. Great diagram

 

Way to chime in guys this is really clear now for sure.

 

Thanks again for the replies. Passed this info on to the shop in hopes that if it is the problem it will be fixed quickly.

 

Hopefully they didnt bugger up the sensor, its an expensive little bastard.