Vacuum switch on top of the transfer case is the most likely suspect. Vacuum servo under the battery tray is next. Vacuum circuit to these componets is next. So obviously it is vacuum actuated. Very few elcetrical/mechanical problems on this system!! Own a 2000, had an older one, replaced the transfer case vacuum switch on both as well as serveral for customers. If the 4x4 light comes on steady (not flashing) then elect. system should be ok.
NAPA part # for the vacuum switch is 7301639.