Recently bought an '03 Yuk XL - Service 4WD

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MassHoe04

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Pretty sure that the transfer case shift motor defaults to 2WD mode if unplugged or not getting any signal to shift.

From what I have seen, switch issues are common.
Can you test to see if any voltage is coming in to the switch connector?

Switches are pretty cheap. Like $20 for new. Not GM, but for $20 worth a giving go...
 

Fless

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Sometimes the switches can benefit from reflowing the solder on the connector pins. If you want to get deeper into the switch and check the resistance of each mode button, look here for a few good links:

 
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03yukXL

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Hi all, just an update here: it was indeed the encoder ring. The tell tale sign was one day I got in the truck with no lights on the 4 wd switch, and another it indicated I was in neutral even though I was in 2wd.

The shifter motor had not been off before. The bolts holding it on were really a pain to get out and we’re seized in the transfer case. Steel on aluminum go figure. Same deal with the shift motor screws, one was so seized in there it broke off and I had to drill it out. Managed to put it back together with 3 screws and some RTV. The ring was 20 bucks, but I also note you can get an off brand shift motor on Amazon for something around 80-90 bucks if the unit is too rough to reinstall.

Anyway thanks for all the good advice all.
 

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