So after changing the hub oil then going for a full day ride on Sunday, the problem seems to have resolved. AWD worked in reverse every time I had to use it. AWD got stuck a couple of times, just had to reverse then go forward again for it to disengage.

 

And that's why I asked in my first reply, "What kind of hub fluid are you using?" I'm glad to hear it worked out for you. My '97 Sportsman 500 got stuck in 4x4 a few times. Once was when I was in 4x4 backing up the side of a hill to turn around.

 

Yep, they MUST be changed regularly to keep working right. You should probably change it again to really flush it out good.