Hi, I'm new to this. So my aunt came to me with her 98 gmc jimmy and said its stuck in 4hi. I told her I can fix it I started looking around and found out that the encoder motor was not workin so I put a new one in hit the 2hi button I can hear the motor working but it blinks then goes back to 4hi. I then grab the front wheels and turn them found out its not in 4hi it's in to 2hi. So I took out the battery and found out the diaphragm actuator was bad and the cable so I change that with the vacuum switch. Now I have no clue where to go as everything is suppos to be working but not going back in 2hi

 

You can pull the TCCM fuse for I believe 30 minutes to make it do a relearn.

 

Need a bit of clarification:
The indicator lites in the 4x4 switch blinks when the 2HI button is pressed, but after a minute the 4HI indicator lites up....is this correct?

The vehicle is actually in 2HI...but will it go into 4HI or 4LO?

The vacuum actuator pulls the cable which locks the passenger side front wheel to the front differential. The encoder motor engages the transfer case and applies engine power to the front differential. By the way, the drivers side wheel is always engaged to the front differential and front drive shaft....so with the vehicle raised if you turn either the drivers wheel or the front drive shaft by hand...the other will turn....but not the passenger side unless it is engaged by the vacuum actuator pulling the cable.

Problem could be that the Transfer Case Control Module (TCCM) is not "seeing" the transfer unlock. Could be the TCCM is defective or the sensor...but I think the sensor is the encoder motor that you already replaced. Could be a bad electrical connection at the encoder motor or at the TCCM.

Suggest disconnecting the TCCM connectors, clean and then re-connect...see what happens.

Not sure if the TCCM is located in the right side foot well under the trim panel just in front of the door at the floor or some other place in a '98...you will have to check on this.

Good luck.