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The transfer case is shifted to either the 4HI or 4LO pos but is not locked in fully or its a malfuncion.

I recently had this happen as well and it was the solenoid valve on the vacuume of the 4 wheel drive. Aamco fixed it great and it is a part that only the dealer carries.

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Q: Why does the four wheel drive light flash in a 2000 Mitsubishi Montero?
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