s3 transfer box problem

The gearbox in my lightweight blew up a while ago so ive just about finished putting in a replacement but on driving it the transfer box jumps out of high every time you let off the throttle. It dosnt feel like the lever is going far enough forward, is there any way to adjust it?

I have the same problem with mine, if you have just replaced the box check to make sure that the lever is not binding on the rubber boot or anything else for that matter.
Theres a detent ball and spring in the box, if the selector cannot move far enough the spring loaded ball does not fall into its notch, therefore it cannot hold the lever in its correct position, and its jumps out.
I've not had mine long and I've not driven it as its not legal, however it looks like its been bodged and the floor panels are interfering with the lever.

Soundproofing on the bulkhead can be a common cause of the lever not going all the way forward. Wear on the pivot pin at the base of the lever (or on my Ser II, replacement of the pin with a nut & bolt!) can be the cause.