4LO not working

I have a 2000 K1500, 117,000 miles, 5.3L, electronic 4wd w/AUTO 4WD. I changed the transfer case fluid at about 100k. Never had any problems. 4lo worked in May, the last time I used it. Tried to put it in 4lo to pull out a little bush (yes, it was little, one really strong guy, or two of me could have done it by hand:tongue:.) I just use it once in a while to "keep it working." So here's what happened;
I was on flat dry ground, put trans. in N, pushed 4lo, light blinked a few times then stayed on, like it should. Put truck in D and it didn't move, put in R and didn't move. When I put it in gear the rpm's dropped, like it was engaged in the transfer, but not putting the power to the driveshafts. So I then put trans in N, and pushed 2hi, it went in with a bang. I put truck in D and moved it a little, and repeated. Same results. I then tried to put it in 4lo while still in D, with brakes applied and not moving, the light on the 4lo button just blinked for a while then it went back to 2hi, like it couldn't engage. AUTO 4WD still works, 4hi works. Any ideas would be greatly appreciated. Also there are no service 4wd lights on or anything like that.

Update if anyone is interested. The guy I emailed at drivetrain.com thinks it sounds like the the shift motor.

Update if anyone is interested. The guy I emailed at drivetrain.com thinks it sounds like the the shift motor.

thats what I was gonna say too. Do this though, put the encoder motor in 4 lo, then crawl underneath and pull it off the transfer case, check and see if the shifter is turned all the way. If not, shift it all the way and see if it works. If it does the tcase is fine and the motor or wiring is your prob..