I have a 2001 silverand when the truck is on the ground the 4wd dont work it says its locked in 4hi but only the back spins you put it in 4low light blinks and goes back to 2hi but if you jack it up on 4 jack stands so no wheels are touchin and put it in 4hi the front end spins like it should but it still dont work in 4low So I put back in 4hi lower it so only the front is touchin the ground and only the back spins I dont understand how it works fine in the air but not on the ground any imput is appreciated
Thanks

 

On mine I replaced the dash switch first and it solved my problems. Apparently the switches are culprit on the early GMT800 trucks and the encoder motor is the culprit on the later model GMT800 trucks.

 

If you can solder, try soldering the connections on the back of the switch. There were problems with the connections as it was bad solder.

 

Sounds like your t-case clutches might be smoked. What does the fluid look/smell like?