Light comes on when you punch it. you can here tranfer shift, drive shaft does not move tested by jacking up one side

Replace the drive shaft universal joint connecting the drive shaft to the rear/differential. Block the car front and rear of a tire, put your sprints shift leaver in neutral, lay on your side on the ground next to the car and reach in and grasp the drive shaft ay the rear and shake it. If it moves up and down and side to side, the u-joint is shot. Replace it.

2 speed electric shift transfer case problems #1 jack up truck place on 4 jack stands. Start and select 4 high position in drive release brake ad watch front driveshaft does it turn "yes" problem is axle actuator on passenger side of differential not engaging axle shaft. "no" apply brakes bring to a stop engage low range does low range work "yes" internal transfer case problems "no" electric transfer case shifting motor failure.

Operationally vacuum shifts the front axle between 2WD and 4WD mode. The GEM ( Generic Electronics Module ) applies ground to the solenoid needed for the mode selected on the switch ( for ESOF ) or when the transfer case shift lever is moved ( MSOF ).The contact plates in the transfer case signal the GEM that the transfer case is engaged, and the Vacuum solenoids need to be activated ( either 2WD to 4WD or 4WD to 2WD ).

Lift and support the front of the truck so the front wheels are off the ground ( take safety precautions, chock wheels, jack stands, etc )
Key on, engage 4x4 and try to turn the front drive shaft.
- If it turns it is a problem with the transfer case.
- If it doesn't it is a front axle engagement problem ( this is what you seem to have, the transfer case is engaged and will drive the front shaft mine was a key on engine off test ).

- If the front drive shaft does not turn :
•With the truck running ( with front wheel back on the ground ), switch from 2WD to 4WD and back again, the vacuum shift motor should move the lever on the front axle.

-- If the vacuum shift motor does not move:
1.Check for vacuum on the lines while shifting between modes. Pink vacuum line is 2WD mode, Light Blue vacuum line is 4WD.
2.Check the fuses for the 4WD system and the solenoids.
3.Check the vacuum lines from the vacuum shift motor to the solenoids on the firewall.

4.Check the vacuum lines from the solenoids to the vacuum reservoir box behind the battery.
5.Check the vacuum reservoir box for cracks.
6.Typical solution is the vacuum lines ( to the solenoids or to the vacuum shift motor ) are cracked or the vacuum shift motor has a cracked diaphragm and has water in it.
7.Could be the shift plate contacts in the transfer case are corroded / not making good contact, and not activating the solenoids.


Usually the case is cracked vacuum lines from the solenoids, the next common is a cracked vacuum reservoir box, and 1 time I have seen the mount for the vacuum disconnect motor broken ( motor floating free so it could not push against the axle )

1. Remove the hub cap and bolt the wheel back in.
2. Punch out the spindle nut lock and loosen the spindle nut.
3. Raise and support the vehicle and block the rear tires.
4. Remove the wheel.
5. Drain the transmission.
6. Remove the all the damper fork nuts and all the brake hose nuts on the damper fork and on the shock absorber.
7. Remove the damper fork.
8. Remove the driver side and passenger side front suspension flange nut inside the engine bay and slide the upper arm out
9. Turn the steering wheel all the way to the passenger side and remove the passenger drive shaft spline from the hub.
10. Separate the inner driveshaft from the transmission with a large screw driver (or crow bar).
11. Remove the passenger side drive shaft. Do not pull.
12. Remove the front radius rod.

Under the car.

1. Remove the center beam.
2. Remove the torque converter cover, the control cable holder and remove shift control cable.
3. Remove the drive plate bolts and four transmission housing bolts.

Inside the engine bay.

1. Place a transmission jack or several small jacks under the transmission.
2. Disconnect all the electrical connectors.
3. Remove the speed sensor gear shaft but leave the hoses on.
4. Remove the distributor and mark the distributor shaft with a razor or a diamond etcher, usually on the head side or both.
5. Remove the throttle control lever cable.
6. Remove the transmission cooler hoses mounting bolts and their 4 washers.
7. Remove the starter.
8. Remove the all the transmission housing bolts.
9. If the transmission won't come out remove a horizontal side engine mounting bolt and raise oil pan (with a wooden block between the oil pan and jack) until the transmission clears.
10. Lower the transmission into the transmission jack.
11. With the driver side front suspension flange out of the way, turn the steering towards the right then remove the driver side inner drive shaft with a large flathead screw driver.
12. Lower the low profile transmission jack and slide the transmission and the jack from under the car. Don't loose the two dowel pins.
13. Block all transmission fluid ports from leakage and dust and dirt.
14. If repairs are being done repair the transmission in a dust, sand free environment.
    

For the 2002 MY ( this is in the 2006 Section, just want to call it out to others that might find the solution, this does not apply to the 2006 MY )

Operationally vacuum shifts the front axle between 2WD and 4WD mode. The GEM ( Generic Electronics Module ) applies ground to the solenoid needed for the mode selected on the switch ( for ESOF ) or when the transfer case shift lever is moved ( MSOF ).The contact plates in the transfer case signal the GEM that the transfer case is engaged, and the Vacuum solenoids need to be activated ( either 2WD to 4WD or 4WD to 2WD ).


Lift and support the front of the truck so the front wheels are off the ground ( take safety precautions, chock wheels, jack stands, etc )
Key on, engage 4x4 and try to turn the front drive shaft.
- If it turns it is a problem with the transfer case.
- If it doesn't it is a front axle engagement problem.

- If the front drive shaft does not turn :
•With the truck running ( with front wheel back on the ground ), switch from 2WD to 4WD and back again, the vacuum shift motor should move the lever on the front axle.
{ picture of shift motor }
-- If the vacuum shift motor does not move:
1.Check for vacuum on the lines while shifting between modes. Pink vacuum line is 2WD mode, Light Blue vacuum line is 4WD.
2.Check the fuses for the 4WD system and the solenoids.
3.Check the vacuum lines from the vacuum shift motor to the solenoids on the firewall.
4.Check the vacuum lines from the solenoids to the vacuum reservoir box behind the battery.
5.Check the vacuum reservoir box for cracks.
6.Typical solution is the vacuum lines ( to the solenoids or to the vacuum shift motor ) are cracked or the vacuum shift motor has a cracked diaphragm and has water in it.
7.Could be the shift plate contacts in the transfer case are corroded / not making good contact, and not activating the solenoids.


- If the front drive shaft turns:
For MSOF systems
-- Check that the shift linkage on the transfer case is moving when the lever is moved from 2W to 4H and 4L.

I am going to take a SWAG that it is 1 of 2 places, both cases the front drive shaft is locking into place.

1. The front vacuum shift motor is not moving ( vacuum or vacuum line issue ).
2. The contact plates for the shift motor are not making contact and are not signalling the GEM that the transfer case state has been changed.

I'd start with the front axle off the ground test, and see which way to go, before you start repalcing items.

1. loosen center wheel nut (look up utube)
2. remove wheels
3. remove rod end
4. remove strut bolts
5. remove center wheel bolts
6. press center shaft off or use a brass punch
7. drop rotor assembly down
8. pull shaft out ( check for circlips or bolting plates)

Sounds like the selinoid on the transfer case is not fully ingaged.....?

check the transfer case selector motor, they go bad and thats what happens, no 4wd and no other lights on switch because its not doing any changing of the tranfer case, to test remove motor ground it and with connector connected, try to switch to 4wd see if motor moves, you can use a test light to make sure its getting power, hope this helps.

Which type is it, ESOF ( Electronic Shift on the Fly ) or MSOF ( Mechanical Shift on the Fly ) ?

Best to check by jacking the truck up ( taking safety precautions, parking brake, chock the wheels, jack stands, etc ), turn the key to the run position and place into 4WD.
If the front drive shaft turns, the problem is in the transfer case.
If the front drive shaft does not turn, the problem is in the front axle.

I would suspect the front shaft does not turn, and the most common cause of this is the vacuum motor on the front axle, the vacuum lines to it, or the vacuum solenoids.
The vacuum shift motor is what locks the front wheels in, and without this action, the PM does not get the confirm that the truck is good to go, and illuminate the cluster indicators ( 4x4, and if 4L the Low Range lamps ).
There are 2 vacuum solenoids, one is 4WD one is 2WD ( to move the motor one way or the other ).
Start with checking for vac on the vacuum motor ( actually it is a diaphragm ). The pink line should have vacuum when in 4WD, the blue line should have vacuum when in 2WD. If not, time to work back towards the solenoids. Use a short length of hose on the vacuum solenoids, and retest.
If still missing vacuum on the 4WD solenoid, I would suspect it is bad, but best to test on the other side of it, to make sure the vacuum reservoir ( mounted behind the battery box ) is supplying vacuum to the solenoids.

This is just the most common cause, best to confirm with the 1st test above, to know if you should look to the trans case, or axle.

This is what the vacuum shift motor looks like on the front axle


These are the vacuum shift solenoids

Tap on the electric shift motor on the transfer case with a small hammer,just incase the bushings are bad in the motor.Then try resetting the shift module which is located inside behind the passenger side kick panel,its white with a little red led light on top,if that doesnt work then try replacing it.