Interesting development this afternoon. After arriving home from work, I jumped in the Montero and decided to try and see if I could drive the vehicle in reverse to clear the issue. To my surprise, when I started the vehicle, the flashing lights had ceased! So, I drove it around for awhile in 2wd, pulled into the school parking lot and proceeded to put it in 4Hi. Now, the symptoms have changed. It failed to initiate 4Hi as the indicators were now flashing, but quit once I put it back in 2wd. After several attempts at this, it finally went into 4Hi, but again started blinking trying to go back to 2wd.
My take away is the 4wd system hasn't been used in quite some time and needs exercising to work properly. This weekend I will attempt to pull back the bellows covering the actuator and clean it and re-grease the actuator. Not saying this is the issue, but I am confident it is not a hard fault, but rather an intermittent one that may be easily fixed.
Thank you all for your insightful feedback! :ylsmoke: