Basically the twin stick separates the two shift rails that come out of the transfercase. 1 is the range shifter, which has 3 positions: low, neutral, or high. The other rail is the one that engaged the front output shaft. It has two positions. I believe the rail closest to the center of the T-case is the range shifter. When they're both pushed all the way in (shortest amount sticking out) you'll be in 4-low.
In order to install a twin stick though, you have to remove the shift rails and grind down part of them. Here's a good article on building up a twin stick NP205
http://www.offroad-tech.com/tech/twinstick205/
You mentioned grinding when pushing against the yoke - that sound like the shaft bearing may be worn or have surface rust. I'd defenitely pull the yokes off (You'll want new seals anwyway) and check out the front/rear bearings. You can get a full rebuild kit for the NP205 for about $175 which has the gaskets & roller bearings. I paid a guy locally who's a 4x4 junkie about $150 to rebuild my case.