Chevy transfer case

I have a question for any GM mechanics. On my 01 suburban, the transfer case is sort of stuck in a neutral position. It won't go into 4 wheel drive or 2 wheel drive. If I hit the button for 2 wheel drive, the light by that button will blink for about 5 seconds, then nothing. If I hit the 4 wheel drive button, light by it does the same thing. Suburban won't move. If I try to put it into park, after trying drive, transmission will grind. The "service wheel drive" message shows up on the message center. There were a few times in the past six months that it didn't want to change from 2 wheel to 4 wheel quite like it should have, and that message showed up then, too. But shutting it off, and starting it back up cleared the message. Is my whole transfer case going to be toast, or is there a shifting solenoid that may be the culprit...? Any advice appreciated, Thanks. Darrel

Most likely its the shifting encoder its on the Left side of the transfer case has three bolts and one electric connector. on some vehicals you need to take the front drive shaft off to get one of the bolts. the control module the part in the dash is the only other part in the system. its cheep and easy to change the encoder is more expensive and you need to get under it to replace it. I did my wifes just pushing it up on ramps with the tractor. it took a couple hours.

a good scaner wil show you the voltages  in and out  of the endcoder motor and also the shift state if it checks out its probley the dash switch .  we just done a 2003 avalanche about three weeks  ago that the guy said it whent into  low going down the hiway but it really didnt .      but i did have it get stuck into nuetral in front of the shop   our fix was the dash switch

Thanks for all of the replies, guys. I am breathing a little easier now that I reletivly sure that it's not something that's going to require a whole transfer case rebuild or replace. Darrel

With a 2004 2500HD, I was getting a "service 4WD" message on the instrument panel, when trying to go to low, 4wd, 2wd, along with AC, blower controls, and others, 5 electrical items getting power from Ignition switch. 

Edited by JoeO(CMO) - 11 Mar 2018 at 11:27am

Dash switch on my 01 Silverado was bad I found it had bad solder connections on some of the pins in the circuit board inspect it with a magnifying glass and you will see hairline cracks re solder them and works like a new one. 

Had a 2005 Silverado....not sure if it applies to 01 or not, but a common shifting problem with them was a bad ground.  Look for a grounding bolt on the frame rail on the left side approximately under the driver's door.  Clean all the connections on it and see what happens.

I'm getting a little nervous. I took this burb into the local service station/repair shop over a week ago. Told him what was wrong with it, and told him that I was relatively certain it wasn't going to need a complete transfer case. I don't see it outside in the "done" row yet. Darrel