Here's the best article I could find on the web (I'm assuming the basics of the system aren't that different between Gen1 and 2 Delicas, Pajeros, etc.):
http://4wd.blogeasy.com/?themeID=37034
Here's one with a better version of the wiring diagram:
http://www.mdocuk.co.uk/forums/wap/thre ... c_id=24189
(Caveat: I can read a wiring diagram, but I've never taken a Delica transmission/transfer case apart, so I'm only going by what I am reading...)
From what I can tell, the centre diff lock/unlock mechanism is indeed mechanically connected to the selector lever on the floor. But there is something that still puzzles me about it. Read on...
The 2WD/4WD (2H vs. 4H/4HLc/4LLc) operation is not. It seems instead to read the position of the selector lever. The engaging/disengaging of the front differential/axles is done by a pair of vacuum solenoids moving an actuator rod back and forth into and out of the front diff mechanism. (per the wiring diagrams - two vacuum solenoid valves shown)
If the floor selector lever is read in the rear-most position, activate the solenoid pulling the rod out and flash the top two wheels on the display.
Once the "free-wheel" sensor on the front diff (however that works) shows that the axle is indeed disconnected, switch the lights off.
Likewise, if the floor selector lever is anywhere forward of 2H, activate the solenoid pushing the rod in and flash the top two wheels on the display.
Once the "free-wheel" sensor on the front diff shows that the axle is indeed connected, switch the lights on continuous.
This seems to jive with the way my van's system operates. If I put the tranny (column) in Neutral and then move the floor selector lever from 2H to 4H, the green lights start to flash. As soon as I drop the tranny back into Drive, I hear a *click* of the actuator rod going in, and the green lights go on continuous. The same deal when switching into 2H from 4H.
But as far as the centre diff lock goes, my *hunch* is that the actual engagement mechanism is some kind of similar actuator driven mechanically by pushing the floor selector lever from 4H into 4HLc. There is no vacuum control for it, so it must be mechanical in nature.
However, just because you have moved the actuator to "try" and lock/unlock the diff doesn't in my mind mean that the parts within the centre diff are actually locked or unlocked.
I'm believing that the centre diff has a sensor similar in operation to the free-wheel sensor on the front axle connect. And if the position of the engagement mechanism (as read back by the Centre Diff Lock Detection Switch) doesn't match the free/locked status returned by the Centre Diff Lock Operation Detection Switch (again, from the wiring diagram), then the orange light will flash, instead of being solid on or off. Otherwise, there is no point in having such a sensor - if moving the lever was 100% guaranteed in locking/unlocking the centre diff, then why bother checking it?
In the end, this thread from the UK forum talks at one point about checking the lock/unlock status of the various parts by jacking up one or both front wheels:
http://www.mdocuk.co.uk/forums/viewtopi ... 112642&sid...
And if I were confident that my sensors/vacuum lines were all wired up correctly, and I've just done something unusual offroad and now my Orange light won't stop flashing, I do those jack-'er-up tests first to see how the internals are actually working, rather than blindly trust the floor selector lever position.
Subject to change without notice, all standard disclaimers apply...

Cry "Havoc!" and let slip the elementary-school-aged boys...