well the gear shifting location is gathered from feedback from the motor encoder. so it would have to be the encoder or it wiring that is indicating to the tccm that it is in 4hi if actually in 2wd. if you are shifting the case manually and not moving the encoder along with then you will likely get a false indication. In your system you should have multiple connectors, as man7y as 5 I think going to the tcase:
Transfer Case: Description and Operation
NVG 236/246-NP8 (Two Speed Automatic)
Transfer Case Shift Control Module
The transfer case shift control module uses the VIN information for calculations that are required for the different calibrations used based on axle
ratio, transmission, tire size, and engine. The system does not know which calibration to use without this information.
The direct battery supply line (CKT 1640) provides the power to the module and motor circuitry.
Transfer Case Encoder Motor
The transfer case encoder motor consists of a permanent magnet (PM) DC motor and gear reduction assembly. It is located on the left hand side
(drivers side) of the transfer case. When activated it turns the sector shaft of the transfer case (clockwise or counter clockwise) to shift the transfer
case. The encoder motor is controlled with a Pulse Width Modulated (PWM) circuit within the transfer case shift control module. This circuit
consists of a driver on both the Motor A and Motor B circuits. The encoder motor is bi-directional to allow the motor to shift the transfer case from
2HI or 4HI to neutral and 4LO positions.
Transfer Case Encoder
The encoder is mounted to the transfer case encoder motor assembly and is replaced as an assembly. The encoder converts the sector shaft position
(representing a mode or range) into electrical signals inputs to the automatic transfer case control module. The module can detect what position the
transfer case is in by monitoring the 4 encoder channels (P. A, B. and C). These inputs translates into AUTO, 2H 4H, Neutral, and 4L or in transition
between gears.
Transfer Case Motor Lock
The transfer case motor lock is used to provide a 2H, 4H, and 4L lock-up feature. When the lock circuit is energized, the transfer case encoder motor
is allowed to turn. When the transfer case is placed 2H, 4H, or 4L the motor lock circuit has no power provided to it and the lock is applied.
This assures that the transfer case remains in the current gear position. When AUTO is selected the motor lock remains applied until an adaptive
mode (torque is applied to the front propshaft) is required. During an adaptive mode the motor lock circuit is energized and the motor lock is
released, enabling the encoder motor to turn and apply torque to the front propshaft.
Transfer Case Speed Sensors
There are three speed sensors on the Automatic Transfer Case (ATC), two on the rear output shaft and one on the front output shaft. Each speed
sensor is a Permanent Magnet (PM) generator. The PM generator produces a pulsing AC voltage. The AC voltage level and number of pulses
increases as speed increases.
Vehicle Speed Sensor
One of the two on the rear output shaft is the vehicle speed sensor (VSS) input to the powertrain control module (PCM). The PCM sends this
information to the transfer case shift control module via the Class 2 Serial Data bus.
Rear Propshaft Speed Sensor
The automatic transfer case control module converts the pulsating AC voltage from the rear transfer case speed sensor to a rear propshaft speed in
RPM to be used for calculations. The rear propshaft speed can be displayed with a scan tool.
Front Propshaft Speed Sensor
The transfer case shift control module converts the pulsating AC voltage from the front transfer case speed sensor to front propshaft speed in RPM to
be used for calculations, and to monitor the difference between the front and rear sensor speed. It is also used in the AUTO (Adapt) mode of
operation to determine the amount of slip and the percent of torque to apply to the front axle. The front propshaft speed can be displayed with a scan
tool.
SERVICE indicator (4WD/AWD) Lamp
The SERVICE indicator (4WD/AWD) lamp is an integral part of the cluster and cannot be serviced separately. This lamp is used to inform the driver
of the vehicle of malfunctions within the Automatic Transfer Case (ATC) system. The SERVICE indicator (4WD/AWD) lamp is controlled by the
transfer case shift control module via CKT 1567.