Diesel Bombers - 1999 4 wheel

Lever activated transfer case or push button?

There's nothing out by the hub that has anything to do with the 4x4. Only wheel sensors for ABS and that's the wire you probably "pinched". Those wires also have a very thick insulator on them, it's unlikely you damaged them, but they have been know to break over time from the constant cycling of the front wheel suspension and steering.

I'll assume you've got a push button transfer case by your description of "lights" and the fact that floor lever transfer cases seem to work forever or fail "spectacularly" when they let go.

There's a few possible causes;

1. Control head - The part in the dash. These are known to have what's called cold solder joints. Basically, where the wire connector is attached to the PCB the joints are weak and loose continuity over time with vibration. Mine was "quirky" (to the point of not working at all) until I opened the switch, touched the pins with the soldering iron and put it back together. Problem solved.

2. Control module - Does just what it says, controls the shifting. It works or it doesn't. I don't know anyone who's had this part fail, but there's always a first time for everything. Replacement is the only cure. Something like 200-400 bucks.

3. Rotary encoder - this is the motor on the transfer case that shifts the case. Replacement is the only cure and it's around 500 bucks from the dealer IIRC. Something like 200 from aftermarket sellers.

4. Axle actuator - unlikely on a 99. You have the newer stepper motor on the axle as opposed to the previous Themo Linear Actuator (TLA). The stepper motors have been proven to be very reliable, but everything eventually fails.

5. Lastly is a bad connection somewhere. Corrosion in a plug, corrosion on a ground, etc. Only one way to find that and that's to trace it all out......