Great news, the mechanic called me friday and said come get the truck I can't fix it. So i drove it home on cruise control like normal. Everything was fine until I went down a slight hill and the cruise backed off. It went into neutral so I pulled over pushed the 4-HI putton. 4X4 came in then I pushed 2-HI and rode on no problems. WTF??

I ABSOLUTELY agree tblrklakemo, the old lever never fails. That was one thing I really missed when I upgraded from my XLT Superduty to my Lariat. Sounds like whatever is causing your problem could create some serious mechanical problems if not taken care of soon. I would quit driving it and find someone to fix it soon before major problems occur. Just my .02 Good luck, hope its just the sensor they're talking about!

Probably the switch.

I was having trouble with my four wheel drive last year. Kept displaying "Service 4WD" and couldn't shift into 4WD. Checked the switch for solder problems. Looked OK, but resoldered everything anyway. Still didn't work. Replaced the Transfer Case Control Module with one from a bone yard and that was the fix. By the way the Transfer Case Control Module is buried DEEP in the dash and was a PITA to find and change. Good luck.

I have a new in the box TCM for the chevys with auto-trac push button 4wd,all the troubleshooting we did on this custtomers vehicle pointed to a bad module,buried deeep in the dash behind the instrument panel. Tried the new 400$ (wholesale) module,turned out to be the encoder motor like everry other one we ever fixed. If someone needs it I will giove someone a deal,Smitty

Finally got chance to work on my truck. It was the modulator motor. Thanks for the help.
Mike Jones