This was a weakness of the Montero Sport models. If you google Montero Sport 4WD light flashing you will find lots of information. The best troubleshooting article I have found is here: http://4wd.blogeasy.com/article.view.run?articleID=318776
This article is about the Pajero, but the Montero Sport uses the same platform so this article applies.
The Montero Sport uses several switches and vacuum modules to put the system in and out of 4WD. If any of these malfunction, the light may flash continuously, flash intermittently, fail to come on, and it can trigger the anti-lock brake light to come on. In brief, if the 4WD shift lever is engaged, but the transfer case doesn't engage, the sensors show a mismatch and will cause the light to act funny including triggering the vehicle's anti-lock break light. These SUV's need to be shifted into 4WD regularly
to keep the switches and mechanisms working correctly.
Try this before you even think about a visit to the $$$$$ Mitsubishi Dealer:
Shift the 4WD lever between 4WD High, Low and 2WD at least 100 times. Often, this will free the mechanisms and resolve the problem. It worked for me after three years of trying everything else including the dealer replacing switches, etc. If this does fix it for you, just be sure to shift the vehicle in and out of 4WD several times at least one a week and this will keep the mechanisms lubricated and functioning correctly. If that doesn't work, try the above link (article). Good luck!