Check your 4wd Selector
When I purchased my 01 last year it had the 4wd disco dash. Much like you have, I replaced the vac solenoid for the front, and went through all sensors, etc. I remembered the dealer's mechanic had mentioned "working the transfer case lever real good". IN addition to his poor grammar, I think he believed it was a mechanical selector. This was the same mechanic that rebuilt the door ajar switches that were "causing a dead battery"...I adjusted the strike plates after signing the paperwork. Good door seal, and imagine that, the dome lights turned off. Muppet.
I removed and disassembled the selector assembly, and low and behold, the housing was cracked and the plastic tab which moves the switch plate portion was broken off. After debating installing external switches, used assembly, I decided to give repair a go. I bent a heavier gauge brass safety pin into tight radius U with parallel sides. I then heated it an plunged it into the selector shaft. After confirming fit and that it moved the switch plate, I greased and re-assembled. FULLY FUNCTIONAL 4WD.
The lever requires that one depresses it...my theory is that the muppet mechanic gleefully worked the lever back and forth sheering the small plastic tab. Result, lever moved back and forth, but the switch plate remained stationary, causing all manner of ECU control confusion. I wonder how many of these trucks have had this switch sheered off by the ham fisted? I think it is worth a look, and it saved me a ton of money. YMMV. 10k miles and nearly daily use of 4LLC and no problems
