Do what Tommy says. My 2007 304 will get a bit fussy if left in 2wd for long periods and it works for me – also I have to ease the clutch out gently or have the tractor rolling a little bit sometimes to get it to slip into 4wd. Often it is impossible to get it to go if the tractor is in neutral – the gears need to be moving a bit to get lined up and slip in.
Out of curiosity, what is your top engine rpm at full throttle? I keep thinking my governor may be set a little low as mine only gets up to 1900 rpm, though the tach shows a bit more to be the “green” zone for the PTO. I have the TY395 3-cylinder engine.