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Sounds as if the transfer case control module has gone bad and grounded the circuit to the 4 low actuator. The module is located behind the headlight switch in the dash. You could try tapping the actuator on the transfer case lightly with a hammer to see if it releases.
for 4wl need to be stopped and put in neutral or park it wont actuate while driving [ blinking light indicates failure to engage ] 4wd hi can do while driving --if fails also then check and test for actuator sticking --control module --or transfer case failure
The 4WD transfer case encoder motor position sensor or the selector switch may fail causing the service 4WD message to be displayed. Fault code(s) stored in the transfer case control module will be of assistance in determining the exact fault causing the message to be displayed.
I have found out that usually the two ground wires that are attached to the frame right under the front of the driver's door is the culprit that causes the 4wd selector switch in the dash to go bad. Chevy had the bright idea of applying the undercoating and/or not cleaning the point of contact of the ground wires before they bolted them to the frame therefore overtime moisture, dirt and corrosion affects the contacts of the threads of the bolts which are the only source of ground the two sets of wires have. There are 2 things you will need to do. First you will need to take the bolts out and use a wire brush to clean down to the metal of the frame as well as the bold threads and ends of the wire attachments and then reattach the ground wires to the frame (time to complete - less than 5 minutes). Second you will need to replace the 4wd selector switch in the dash. You can purchase this online from Amazon (Dorman 901-062 4-wheel drive switch for $31.15 - no tax or shipping and handling). To replace, gently pull the outer trim of the dash out by using just your fingers. You do not need to completely remove it, just pull it out far enough so that you can pull the old switch out of it slot. Then unplug the two plugins located in the back of the switch. Plug them into the new switch and push the switch back into the slot and then push the trim back into place (time to complete - less than 5 minutes). This should take care of your problem. Most often, people make the mistake of just switching out the dash switch and when that does not correct the problem they then replace the more expensive and time consuming actuator motor and location indicator on the transfer case that does not need to be replaced. I should point out that when the Service 4WD light comes on