Check Shift Switches

Electronic Shift Transfer Case Schematic:

It the problem isn't in the Sensors or the Motor, check the CONTROL PANEL SWITCHES.
1. Make this check with the ignition ON.
2. DISCONNECT the "B" and "C" connections to the Sensors, so that their data won't confuse the diagnosis.
3. Now check POWER at the C1 connection at the Module.
4. There should be 5 volts coming from the Shift Control Module to the 4H and 4L switches.
5. Check C1, C2, and C3 for short to ground.
6. Check the Switches themselves by DISCONNECTING C1 and checking CONTINUITY across C1 to C2, and C1 to C3.
7. If current passes when the switch buttons are PUSHED, the switches are OK.
8. Finally, check for a short between C2 and C3 by bridging between them and activating the 4H and 4L buttons. There are situations where wiring harnesses get crushed in such a way that TWO wires are crushed together and short, even though there is no short to ground.