I had this problem last year when the first big snow hit here in Utah. I went to engage the 4WD and got the service 4wd error message. Didn't hear anything happening down below (shifting). Two weeks later just before I took it to my local shop I decided to give it one more try and it worked perfectly like it had never had any issue. (it had been displaying the same error code for the two weeks)
Now, here we are in winter again and I'd like to be able to use my 4WD. Just had our first big snow and what do you know....no workie. Same problem as last year. I just talked to a mechanic friend of mine that has worked on plenty of GM vehicles. He said it's one of 3 things:
1. The encoder motor - big $$ - must be replaced. All that jazz.
2. The ground wire or control wire for encoder motor. He mentioned that sometimes these get corroded and cause issue. East fix if I can locate.
3. Electrical control in the fuse area. He said that some models get some water down in there (fuse section at driver front) and it causes issues. I have a small water leak in the driver door which drips into this area so could be.

ANYONE know for sure? I'm having a hard time figuring this one out due to it being somewhat intermittent. I need my 4WD to be working STAT so I can take this beast up into the mountains for some snowboarding!
Any help is greatly appreciated! Thanks!