First off, you must understand what the differential does: when turning, the outside wheel is turning faster because it is following a larger circle than the inner wheel. The differential allows the outer and inner to turn at different
speeds, otherwise you would have excessive tire wear and/or breakage of parts. The bad thing is that when one tire is on a slippery surface, the tire that grips will stay in place and power will be directed to the wheel that has the ability to turn. The wheel spins while the tire on dry ground does nothing.
Limited slip overcomes some of this by using clutches inside the differential that when uneven overturning of one side of the axle occurs, they redirect some of the power to the slower turning side, the side with better traction. This does not "lock" the two halves together, but it does improve traction where one tire sits on ice and the other on firm ground. The down side of this is that on solid ice, both wheels can spin and allow the truck to quickly slide to one side or the other.
Other methods are used such as spools-the rear axle is solid and does not allow any differential between the two sides. This is used only on off-road racing trucks and can not be driven on paved surfaces. Other fancy devices exist in locking axles, such as Air-lockers that use air to drive a device in the axle to lock both sides as needed-making it into a spooled axle, or Detroit locker that basically locks the axle like a spool, but has a ratchet to allow the outside tire to speed up in a turn. They are noisy though as they work much like your ratchet wrench, or the free spool on a bike.
-Limited slip is NOT provided in most front axles-
-The hub will turn freely when unlocked-that's what it is supposed to do-
-Limited slip was not as common on smaller trucks in those years. It is true that most 4WD trucks will act like a 2WD if it happens where one wheel of the front and one of the rear wheels have no traction. You could have two wheels spinning, and two stationary, one front, one back. The difference being that most 2WD vehicles have only one wheel driven in slippery situations. The 4WD offers better, but not perfect traction.
One thing to try is with the wheels on the ground, is to lock the hubs but not the transfer case. (Chock the wheels! Safety! Safety!) From underneath, grip the drive shaft going from the transfer case to the front axle and try to turn it-it shouldn't turn at all. If it does, you will see one of the shafts from the axle to the wheels turning and most likely it is that hub that is damaged.
The hub is fairly easy to remove as you only have to remove the tire and several metal clips (They could be missing after this amount of time) and pull off the hub. You should see a splined shaft protruding from the center. Make sure this appears undamaged. DO NOT TRY TO TAKE APART THE HUB ITSELF!!
You can probably find one at a salvage yard or they are available as an aftermarket item. I doubt Ford would still carry them. The good news is that they shouldn't be year specific so most Ranger and/or Bronco II hubs should work.
To verify whether you axle is LS or not, check here:
Ford Ranger Axles - The Ranger Station