@Dblex you may not get an answer because this thread is six years old, but maybe my experience will help you. With 85,000 miles on my GEN1, my truck experienced the same kinds of failures reported here. It was a surprise to me, because I had changed the transfer case and differential fluids several times before this started to happen. I tried all kinds of things to get the system to reset, but it eventually became necessary to take it to the Ford dealership.
While diagnosing the problem the dealership managed to get the transfer case irretrievably stuck in 4Hi. They went to rather involved lengths to get it back in 2WD and failed. So they ordered me a new transfer case and told me not to exceed 50 mph until it came in. The transfer case cost me $1,155.82, labor was $540.00, and replacement bolts were $24.00 for a total of $1,719.82. I asked for and received the failed transfer case and took it home.
As I had done much more maintenance on the failed transfer case than was required, I was curious as to what caused it to fail. So I split the case, and doggone if it didn't look brand new inside. There was no metalic debris in evidence at all. Nothing. So I loaded it up in the truck and took it back to the dealership. The service manager got some tools and took it apart a little further and found the problem. There is a ring-shaped electromagnet that locks the transfer case in whatever mode you've chosen, and there was visible evidence that it had failed. The metal parts that are locked in place by that electromagnet were scored, which indicated slippage.
So the failure of my transfer case was not mechanical, it was electrical. And rebuilding the transfer case would have cost more than a whole new replacement transfer case if the parts could be made available from the manufacturer (which isn't Ford). I haven't had any trouble since.
