Can someone give me a technical explanation of how the Auto 4WD system works? How the components tie together?
I have been experiencing an intermittent Service 4WD light problem for months now. Everything will be fine-no warning lights, shifting works. I'll be driving on the highway (2WD-HI) and the Service 4WD light will come on. When I get where I'm going, turn the car off, turn it back on, the light may or may not come back on. If it does, it usually goes out next time or 2 that I shut the car off. If may come on again in a day, or not for a week. Rarely does it come on right when I start the car, it's mostly when I have been driving it for a half hour or more, but no always. (I've been on the highway for an hour & half with no problems).
Vacuum hoses and solenoid for transfer case were replaced last year.
2001 LT with 4 button (?) control Auto 4WD

 

Sounds like my issue. Maybe we can work to this together. As I had a similar question posted here.

-Can you currently switch from 2 - 4Hi, 4LO, and Auto?
-If the check 4wd light has come on and off quite likely there are codes in there. See if you can get a reader.
- Did you check the connection at the TCCM on the passenger side? Sometime rust gets in there.
-Also check driveshaft.

I have fixed all the things on mine like you as well as replacing my front driveshaft and I replaced the Shiftmotor twice. As we thought it might be defective as I had the same problems. Mine worked after the first shiftmotor was replaced, then got stuck in 4LO, so we thought the Shiftmotor was defectived. Still have the same problem. I starting to think maybe the sensors on the transfer case.