My 1994 4runner (manual) starts and goes into gear, but will not move. If the transfer case is broken, can I take out drive 4 wheel drive and drive it in 2 wheel drive?
tl dr: No
The transfer case sits at the back of the transmission. It has two drive shafts which come off of it, one to the front and one to the back. You'd have to install a different transmission and driveline to the rear in order to do what you are talking about. It would be far cheaper (and easier) to get a transfer case fixed or replaced than to go about what you are suggesting.
With that said, what makes you think it would be the transfer case? Seeing as how this is a manual transmission, I'd suspect the clutch had gone out before I'd suspect the transfer case, unless there was something specific which happened to make you believe it's the t-case.