Beautiful tractor! SynchroShift transmission (column shift). Series 2, and I was wrong about the ZF, used 1984-87, which this has, being only on series 1. Made in Basildon, England.
It has a multiclutch transfer case and it should be engaged in 4wd without oil pressure. It is oil pressure that disengages most hydraulic actuated 4wd clutches (#26), regardless of brand. Even when the tractor is shut off, the 4wd will be engaged. I am thinking that you have either a burned up clutch pack or something broken in the transfer case that is causing the clutches to slip.
You can try a couple of things. Jack up one front wheel with the engine off and try to turn the wheel.
By the way, did this happen suddenly or off and on?