When i am driving it acts as if the transmission is going into 4 wheel drive

all wheel drive is not 4 wheel drive
there is a diff in the transmission that supplies power equally to the front and read wheels
when traction is lost on a drive set , the other set will remain stationary and the set without traction will spin as in your description
the same result will occur if you have both driver side wheels in a bog, the passenger wheels will be stationary and the drivers side wheels will spin
on some AWD vehicles and I thing yours has one there is a button that can be engaged that stops the transmission diff from acting like a diff and then the rear wheels will drive
read you owners hand book for driving in bad conditions

what was your test to determine the failure ?
if you jacked up one end and the car didn't drive off the jacks , that is how an all wheel drive works
It has a differential in the transmission that allows the front axle to drive at different speeds to the rear ( same as one wheel on the axle will go faster than the other when going around corners)
it is used to prevent torque wind up in the drive train and destroying transmissions , diffs and drive lines
it has to have all 4 wheels on the ground so that the 3rd diff is not operational unless going over a speed bump or dips in the road
however if you have a 4 wheel lock for the transmission, that is different as it locks up the 3rd diff in the transmission making the car a 4 x 4

What large square fuse ? The 4X4 switch get's it's B+ voltage from the four - wheel drive control module . computer controlled ! Has two relay's - transfercase hi to low & low to high ,located in the Auxiliary relay box #3 . location left side of radiator core support . Your best bet ,take it to a qualified repair shop that has a diagnostic tool that can communicate with the 4X4 control module . Read code's ! Probably has a code like one of these
P1812 Transmission 4-Wheel Drive Mode Select Circuit Failure 4WD control module Go To Pinpoint Test D . P1815 Transmission 4-Wheel Drive Mode Select Short Circuit to Ground 4WD control module Go To Pinpoint Test A .
But code have a few others as well .
B2105 Throttle Position Input Out of Range Low 4WD control module Go To Pinpoint Test B . B2106 Throttle Position Input Out of Range High 4WD control module Go To Pinpoint Test B . C1728 Transfer Case Unable to Transition Between 2H and 4H. 4WD control module Go To Pinpoint Test C . C1729 Transfer Case Unable to Transition Between 4WD HIGH and 4WD LOW 4WD control module Go To Pinpoint Test D . C1979 IWE Solenoid Circuit Failure 4WD control module Go To Pinpoint Test F . C1980 IWE Solenoid Short to Battery 4WD control module Go To Pinpoint Test F . P1812 Transmission 4-Wheel Drive Mode Select Circuit Failure 4WD control module Go To Pinpoint Test D . P1815 Transmission 4-Wheel Drive Mode Select Short Circuit to Ground 4WD control module Go To Pinpoint Test A . P1824 Transmission 4-Wheel Drive Clutch Relay Circuit Failure 4WD control module Go To Pinpoint Test A . P1826 Transmission 4-Wheel Drive Low Clutch Relay Short Circuit to Battery 4WD control module Go To Pinpoint Test A . P1827 Transmission 4-Wheel Drive Low Clutch Relay Short Circuit to Ground 4WD control module Go To Pinpoint Test A . P1849 Transmission Transfer Case Contact Plate A Short Circuit to Ground 4WD control module Go To Pinpoint Test D . P1853 Transmission Transfer Case Contact Plate B Short Circuit to Ground 4WD control module Go To Pinpoint Test D . P1857 Transmission Transfer Case Contact Plate C Short Circuit to Ground 4WD control module Go To Pinpoint Test D . P1861 Transmission Transfer Case Contact Plate D Short Circuit to Ground 4WD control module Go To Pinpoint Test D . P1867 Transmission Transfer Case Contact Plate General Circuit Failure 4WD control module Go To Pinpoint Test D . P1891 Transmission Transfer Case Contact Plate Ground Return Open Circuit 4WD control module Go To Pinpoint Test D .

don't drive it,you have tranny issues

The 4X4 system on your vehicle is computer controlled , GEM module . generic electronic module . The four wheel drive mode switch is a low voltage input to the GEM module . The GEM energizes relay's to control the mode as depicted by input from the mode switch an torque on demand relay an someother inputs . Probably has DTC - diagnostic trouble codes stored in the GEM module .
Transfer Case -Automatic Four-Wheel Drive (A4WD) The automatic 4-wheel drive transfer case system consists of the following:

• automatic 4WD indicator light
• brake pedal position (BPP) switch
• torque on demand (TOD) relay
• front output shaft speed sensor
• generic electronic module (GEM)
• 4WD high indicator light
• 4WD low indicator light
• 4WD mode switch
• rear output shaft speed sensor
• shift position sensor
• throttle position output (TPO) from the powertrain control module (PCM)
• transmission range sensor P1804 Transmission 4-Wheel Drive High Indicator Circuit Failure GEM REFER to Section 413-01 . P1806 Transmission 4-Wheel Drive High Indicator Short Circuit to Battery GEM REFER to Section 413-01 . P1812 Transmission 4-Wheel Drive Mode Select Circuit Failure GEM REFER to the Symptom Chart. P1815 Transmission 4-Wheel Drive Mode Select Short Circuit to Ground GEM GO to Pinpoint Test C . P1820 Transmission Transfer Case Clockwise Shift Relay Coil Circuit Failure GEM GO to Pinpoint Test B . P1822 Transmission Transfer Case Clockwise Shift Relay Coil Short Circuit to Battery GEM GO to Pinpoint Test B . P1824 Transmission 4-Wheel Drive Clutch Relay Circuit Failure GEM GO to Pinpoint Test A . P1826 Transmission 4-Wheel Drive Low Clutch Relay Circuit to Battery GEM GO to Pinpoint Test A . P1828 Transmission Transfer Case Counter Clockwise Shift Relay Coil Circuit Failure GEM GO to Pinpoint Test B . P1830 Transmission Transfer Case Counter Clockwise Shift Relay Coil Short Circuit to Battery GEM GO to Pinpoint Test B . P1836 Transmission Transfer Case Front Shaft Speed Sensor Circuit Failure GEM GO to Pinpoint Test A . P1837 Transmission Transfer Case Rear Shaft Speed Sensor Circuit Failure GEM GO to Pinpoint Test A . P1838 Transmission Transfer Case Shift Motor Circuit Failure GEM REFER to the Symptom Chart. P1846 Transmission Transfer Case Contact Plate 'A' Circuit Failure GEM REFER to the Symptom Chart. P1850 Transmission Transfer Case Contact Plate 'B' Circuit Failure GEM REFER to the Symptom Chart. P1854 Transmission Transfer Case Contact Plate 'C' Circuit Failure GEM REFER to the Symptom Chart. P1858 Transmission Transfer Case Contact Plate 'D' Circuit Failure GEM REFER to the Symptom Chart. P1866 Transmission Transfer Case System Concern - Servicing Required GEM REFER to the Symptom Chart. P1867 Transmission Transfer Case Contact Plate General Circuit Failure GEM REFER to the Symptom Chart. P1874 Transmission Automatic Hall Effect Sensor Power Circuit Failure GEM GO to Pinpoint Test A . P1875 Transmission Automatic Hall Effect Sensor Power Circuit Short to Battery GEM REFER to the Symptom Chart. P1891 Transmission Transfer Case Contact Plate Ground Return Open Circuit GEM REFER to the Symptom Chart. P1892 Trans. Automatic 4-Wheel Drive 4X4 Mechanical Lock Output Circuit Failure GEM GO to Pinpoint Test B . P1893 Trans. Auto. 4-Wheel Drive 4X4 Mechanical Lock Output Short to Battery GEM GO to Pinpoint Test B .
• Your best bet , take it to a qualified repair shop .

Canyou shift it out of 4 wheel drive or is it computer controled or is it full time 4 wheel drive . The problem is like a transmission related one . You need to take it to a transmission shop fast it could be something simple like a spilt vacuum line but you need to act now things like this just more expensive the longer you drive them with the problem. Good luck with it

Depends, do you have 4 wheel drive? If so you can just use 4 wheel high, or if things get really slippery, use 4 wheel low and go slow, both in the drive position on the transmission shifter.

If 2wd, just use drive and go slow, again, if it gets slippery out, you can shift down in gears to go slower and to keep your speed slow.

If you're talking about snow and ice on just streets, then stick with 4 wheel high with 4x4, or "drive" in 2wd. You typically don't want to switch to 3,2, or 1st gear at highway speeds.

If you're playing in the snow, just use 4x4 high until you get stuck, then switch to 4 low to get out.

The only time I switch gears with the transmission (from drive to 3,2, or 1) is when I want to go really slow and keep it there. However, when I "play" in the snow, it's Drive only.

Does this answer your question? If not, let me know! Thanks

Mike check your oil for gas. smell the dip stick or change and see. I just had this same problem with mine. It was the fuel pressure regulater goge bad allowing gas to get in the oil

yes i am sure you are right for what you said is it electrical shifted or is it hand shift .you need to check and see if electrical ceck the shift soleniod if dirty or rusted if rusted you must clean it with fine water sand paper or if stuck remove it and replace it .if it is hand shifted you need to check
if lever is not jamed if so you need to clean the moving parts cause the also rust up

Putting it in four wheel drive does not eliminate the transmission. Honestly, it sounds like the transmission is on it's way out. A 4l60e in one of cars was acting the same way. It required a rebuild.