I checked for codes this morning and none popped up. FYI, according to the factory manual any codes that popped up would be related to the 4X4 module(PCM). This may simply be because my scan tool is only really reading the OBD test that occurs when you turn on the key. If I understand the shop manual correctly, the Ford techs use their WDS which allows them to test specific systems and sub-systems. So for now I will take the fact that no codes showed as good news. I may just order and replace the solenoid because it is inexpensive and might work and at the very least I will have eliminated that as the cause. If I had somewhere out of the weather where I could crawl around and check the vacuum line I'd check that first.

Does anyone know if it is possible that this could be caused by low fluid in the transfer case?

I did this on my truck, and I know it's a lot older, but might help. https://www.f150-forums.com/1987-1996-ford-f150-16/how-change-transfer-case-oil-191/ You can pull the top fill plug and add a little if you suspect the level is low. But I don't feel this would cause your problem. I would still lean towards your hubs not engaging correctly.

I don't think it is either but it never hurts to check I guess. Originally I didn't think it was going from 4H to 4 L either, but I checked it again, and it seems that it might be. That is it feels like it is in a lower gear. I still don't feel the sluggishness in the steering that you would normally feel when the truck is in 4WD.

Again thanks for everyone's suggestions and help.

I installed the new solenoid and it kind of fixed things. The driver side hub is still locked, but by the condition of the fitting on the old solenoid the vacuum line is probably blocked. Once it warms up a bit I'll pull the lines off and check them out. I definitely have the 4WD working again. The street I live in is like a total sheet of ice right now, so I tried everything out and I had no traction problems when in 4WD. Almost couldn't move when it was in 2WD.

Anyways here is a picture of the old solenoid

http://i321.photobucket.com/albums/n...uchter/007.jpg

Gross dude! lol
Definitely need to pick check things out, get a vacuum gauge, etc. Mine was actually clean but it looks like you sucked something nasty up into there. Must have a broken line or....?

Good to hear you found it and the fix was easy enough.

So, it turns out that I am going to have to change the IWE on the drivers side. So I have checked both my factory manual on DVD and my Haynes manual and the place I can find where it talks about removing the IWE is as part of the half shaft removal. My question is for those of you who may have done this repair already is did you have to actually remove the half shaft or can the IWE be replaced without taking the half shaft right out?

I changed the IWE this morning and yup, it needed to be replace.

Once I got the wheel off and got the rotor and everything out of the way, I removed this

http://i321.photobucket.com/albums/n...hter/002-2.jpg

http://i321.photobucket.com/albums/n...hter/003-1.jpg

I was cleaning inside the hub and realized that I had not removed the complete IWE and removed this.

http://i321.photobucket.com/albums/n...hter/004-2.jpg

http://i321.photobucket.com/albums/n...uchter/005.jpg

So there you go. It was obviously like this for a long time. One more reason they should stop using so much salt on the road in the winter. Anyways here's a couple more of the two pieces fitted together.

http://i321.photobucket.com/albums/n...uchter/008.jpg
http://i321.photobucket.com/albums/n...uchter/009.jpg

Thanks for all the great info. I am having what I think is almost an identical issue to yours, however I am getting the grinding/whining noise while in 2WD. As I have already replaced the solenoid I think the bad solenoid either caused the IWE to go bad or a vaccuum leak. Do you by any chance have the procedure for changing the IWE's. I have looked at it with the wheel off and it doesn't look that hard but there are always some little nuiances. Any info you have would help.

4x4 keeps engaging and disengaging it pulses,