The picture was off the internet, and is a Spicer hub.
I have the same hub on a 1978 K20.
It has been a long time since I have been inside the hub, but I sure don't remember having two snap-ring grooves on the axle.
The only way I can think of that would prove that the groove you are using is wrong would be to turn the dial to unlock. Then see if it actually did unlock.
If it will not unlock you know you are in the wrong groove OR the plastic cam is worn out.
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Today's Featured Article - Show Coverage: Journey to Ankeny - by Cindy Ladage. We left Illinois on the first day of July and headed north and west for Ankeny, Iowa. Minus two kids, we traveled light with only the youngest in tow. As long as a pool was at the end of our destination she was easy to please unlike the other two who have a multitude of requirements to travel with mom and dad. Amana Colonies served as a respite where we ate a family style lunch that sustained us with more food than could reasonably fit into our ample physiques. The show at Ankeny
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