I believe that's the one and your right the switch itself is nowhere near the master cylinder but there is a connection for it right by the MC, figured it be a better spot to disconnect it incase the wire is in fact bad somewhere around the diff/engine etc

looking at rockauto I come up with this
STANDARD MOTOR PRODUCTS Part # TCA6 (#15598481, 8155984810)
Mounted on Front Axle Right Side

$13.55+shipping

 

The switch is open in 2WD, so disconnecting it should make no difference. Now, if the switch is stuck closed, (telling the TCCM it's in 4WD) power from fuse #4 would travel through the switch and possibly up to where you disconnected it. It goes to the EBCM, (ABS) so there might be a problem in the EBCM. Try disconnecting it right at the switch.

 

this truck makes me so angry lol no issue's with the gauge cluster/alternator since my last post but now transmission codes! P1860, 740 and 745 I think and everything I read usually points to the ignition switch which I just replaced... It was the cheaper ignition switch so kind of tempted to toss the original one back in since changing it never really helped anything months ago and see what happens