You likely have a bad actuator and given the vehicle age it is quite
possible. Also check the front axle disconnect on passanger side of
front differental. Is it does not disengage properly, the 4x4 light
will stay on even though the Tcase may not actually be engaged.
They is a vacum actuator that is electrically controled that runs the
cable that controls front axle disconnect. If it does not cycle
properly, the 4x4 light can stay on. I have GM manuals on it here and
it can be a bit messy to trouble shoot for looking at the test
proceedures. (one reason why I would never own a push botton 4wd drive
system) If it is not the front axle, there could be several possible
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