the most common problem woud be the transfer cae acuator[encoder]it may need to be replaced
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Bulletin No.: 04-04-21-004
Date: December 16, 2004
with Four-Wheel Drive (4WD)
Some customers may comment that the Service 4WD light is on, the 4WD system is inoperative or the 4WD switch indicator lights are blinking.
Technicians may find DTC C0327 in the Transfer Case Control Module (TCCM). This would indicate an encoder sensor malfunction.
It is also possible that the module may be in a mode that will not allow any shifts or updates for the software or calibrations. If this occurs, the TREC fuse (in the engine compartment) must be pulled and reinstalled after 30 seconds.
This should allow further operation and service of the system. If a C0550 code is found, this is an unrelated concern and SI diagnostics should be followed for this concern.
Tighten all four bolts to 13.5 to 17.6 N.m (10 to 13 lb-ft).
Parts are currently available from GMSPO.