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I had the same problem. My transmission guy checked the codes and determined that the solenoid was shot. There are evidently two different solenoids. He recommended changing them both at once. Quick fix.
I had the same situation with my 01. I went to my local 4X4 specialist and he said the Dana Powr-Lok was the OEM unit. A little research showed the Powr-Lok to be a solid performer. I have been very pleased with the unit. A word of caution, I has taken almost 3 bottles of friction modifier to...