It sounds like I have the same or similar problem but I was told my hummer was stuck in 4Hi lock even though the light indicates 4Hi.

So with this other guywho had the problem was it really the front diff and not the transfer case.
I did check my actuator and it sounds like its moving but it feels like its still in 4Hi lock.

Any suggestion

 

Dealer time!

 

For what it's worth I NEVER EVER EVER turn a 4x4 at full steering wheel stop..... EVER....

 

I have an 03 h2.. on my gauge cluster my my shift position light will not go to neutral when gear shift is in neutral,, and so consequently I can not get my transfer case to shift into 4 low lock.. I only have 4 high open, and 4 high lock.. any suggestions?

 

I am certainly no mechanic, but mine was doing something similar (2006 H3). The entire transfer case was bad and had to be replaced. My wheels also felt like they were trying to lock or grab, mainly when going around corners. Don't be surprised if the encoder motor is bad too. Sure hope I am wrong. Good luck.

 

Mine will not go into 4 low..... Just have not had a chance to mess with it though. It will go into neutral and will go into 4 hi okay. Of course cannot lock the rear without 4 low so I cannot even try to check that.

When I try to go to 4 low, directly from normal open hi or 4 hi locked or neutral I can hear it making a bunch of noise and trying but never quite gets there then the light flashes and I get the service 4wd message until I restart the truck.

I'm about to buy a Tech2 (been wanting one forever) which will be very nice to have in troubleshooting things like this.

 

Im confused....are they saying that the diff is binding or the transfer case is stuck in 4lock?

 

Did you ever figure this out. My 03 is doing the exact same thing.

 

Nope - I have not had a chance to mess with it yet. Planning on it this summer when I have my GMC back on the road. Then I can have the H2 out for a couple of months to work on various things I want to take care of. Right now its serving as my daily driver though and both of my other vehicles are currently out of service with work on doing on them....

 

So i just fixed my 04 that did the same thing, it was the plastic spring loaded piece the shift fork moves.
If it makes you feel any better this was a fairly easy Tcase to remove and rebuild....my 07 f150 is SOOO much harder.
Make sure you put the TCase in neutral before ripping it out, it will save some headache putting it back together! i learned this as well. I also have the factory service manual if you need.
here's a pic: