2000 S10 Blazer

I've done a lot of reading here on the forum the last few days, but can't find anything that matches the issue we are having with my son's truck.
It started with "service 4wd" light, nothing else at the time. A few starts later and it was not lit anymore. Then a few days later it came back on.
The next time it was started the "4Lo" light was on. No one put it in "4Lo".
This has happened a few times now. Last night he was coming home from school and it went into 4 low as he was pulling away from a traffic light (luckily he was going slow at the time). He pulled over and got it back into 2 wheel. He talked to a friend of ours who is a mechanic and asked him how to disconnect it for now until we can get it fixed. He disconnected an electrical connection on the firewall, not under the battery, that looked like it had two vacuum lines coming off of it.
The "4Hi" was blinking after that, but it was not in 4WD. He said it kept blinking the rest of the way to school (about 25 miles).
The transfer case was replaced this past January.
Anyone have any thoughts as to what could cause this?

I seem to remember reading somewhere on here that the TCCM gets it ground from the neutral safety switch.
Does that make any sense?
The reason I ask his back up lights don't work and isn't the switch for the back up lights part of the neutral safety switch?

 

The Tccm could be going hay wire, also I don't know why it went into 4lo but i wouldv'e taken the shifter cable out of the vaccuum diaphram underneith the batterie tray. There is a little clip that you pull sideways and the tip should just pull straight out. This will make it so the front differential can't lock in(and keeps all systems vaccuum and electricle closed so corosion and possible contaminates can't enter), so even if the 4x4 tries to engage at the transfer case it still won't be able to fully engage.