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Is it a pushbutton four wheel drive. I'm pretty sure that year is. Nonetheless, the next thing to see is if the switch light just flashes or just stays at 2 high. If it is just flashing, good bet that you the shift actuator has a problem. I cant remember on those trucks but it's either bolted to the front diff or bolted to the transfer case. If no lights light up check to see if there is a fuse for the four wheel drive actuator. Good luck and let me know if this helps.
its possible that the problem could be in the transfeer case. you didnt state which 4x4 unit is in the jeep.... there were 3 types, one was all wheel drive full time with a low gear selector, the 2nd was a part time 4x4 manual shift with a low range selector and the 3rd was a pushbutton on demand 4x4 unit. if your jeep is a all wheel drive unit and you are having these problems its defititely something for a transmission shop to look at due to how everything works. if you have the manual select, are you following the proper shifting procedure for the transfer case (found in the owners manual and possibly also on the inside of the driver sun visor). as for the pushbutton if you are not having any electrical issues( no lights on the selector switch) it could be the the transfer case itself. if you are sure you are performing mode changes (2wd to 4wd or 4wd to 2wd) properly its probably time for a shop to take a look at it.
I would try to replace the switch. I believe that chevy had a bunch of problems with the 4x4 switch. I had a message on the display the something was defective with the 4 wheel drive, and it just ended up being the darn switch. Hope this helps.