I just fixed this same problem on my son's 96 Stratus this evening. The first thing you want to try is to pull the IOD fuse in the fuse box. The IOD fuse is the one in the #5 slot, that controls the interior lights and radio memory.
With the car off and the key out of the ignition,pull the IOD fuse. wait about a minute, then replace the fuse. Turn the ignition to the "On" position (but not all the way to start).
This clears the BCM faults, and causes the HVAC system to re-calibrate. You should hear a series of whirring sounds (other that the whirring of the fuel pump). Once these sounds stop, you should be able to switch from defrost to the other settings.
Hope this was helpful :-)
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