Drive train seems to "crab" on 2001 GMC Sierra C3

When turning at low speed, as in a parking lot, the front seems to "crab".

This could be caused by a defective or glazed power steering belt and or belt tensioner, that is causing the belt to skip. This is actually pretty common.
I was think of perhaps a bad sensor in the AWD system. This would send a bad/incorrect signal to the control system.
2 more answers
transfer case is locked up,remedy may be flush and refill as per service bulletin.
Mine did the same thing and it ended up bieng a bad gear in the center differential. Had to have it replaced. Spendy, but fixed the problem.