Aside from the three range-sensing plunger switches on the AT transfer case there is yet another one of these switches in the rear axle that senses when the diff lock actuator has mechanically locked the diff.
Make sure that your diff isn't actually locked ... jack up the rear end and verify that when you rotate one rear wheel the opposite wheel rotates in the same direction. If it does, then the diff IS locked, and it's possible that the position sensing switch isn't electrically closing and is failing to send the 4WD ECU the signal to indicate the diff is locked.
If the rear wheels rotate in opposite directions, then the diff is not locked, and you'll need to determine if the locker is getting the signal to lock, and if it is, if the locker is jammed, seized or otherwise non-functional.