Chevrolet Repair Questions? Ask a Chevy Mechanic for Answers ASAP
from what your saying when the transfer case is shifted in and out and it will work again the odds are and is very common is the transfer case encoder motor on the side of the transfer case causing this issue
a switch usually would not cause this issue and if the fluid is clean and full and there is no transfer case abnormal noises at all replacing the encoder motor on the transfer case usually corrects this type of issue
that usually leans up more to to the encoder motor as usually with a switch or even 4WD module being an issue those both would trigger the service 4WD message
if the inside of the transfer case is good the only thing left would be the encoder motor
how are you making out ?