I wanted to repost for the benefit of others who may (will) run into this issue, since I think the main benefit of these posts is helping others with the same problem.
Firstly, Alldata is a great resource, but is geared more towards shops than the guy in his driveway who is trying to save a few bucks. I have no access to a GM scan tool or tool # J-getreal. That being said, I did use Alldata's flowcharts and schematics to solve the problem.
When I tried to shift into or out of 4X I would get a buzzing from the encoder motor and the solenoids in the TCCM would click. Same thing after the encoder was replaced. Finally I grounded pin E1 (top left tan wire on big orange plug) and presto - away it went. Shifted flawlessly without a buzz. Seems there is a clutch solenoid that holds the shift (encoder) motor in place at all times EXCEPT during a 4X shift. The TCCM must release this clutch before shifting (by grounding the tan wire) and this is what wasn't happening. I'm fairly certain that one of the solenoids in the TCCM is faulty, but without trying to replace it I'm not sure. In any case I found a new one on Ebay for $200, plugged it in and it works fine.
So in this case aside from my time and aggravation;
Rebuilt encoder motor $270 (wasn't really required)
Ebay TCCM module $220
Alldata subscription $ 26
TOTAL: $516
GM shop quote: $2500
Saved: $1984
What I learned about GM shift on the fly 4X's --- priceless!!
And for those that aren't sure (because I wasn't) - the transfer case control module does NOT require programming. The body control module which works the lighting, keyless entry, security, etc., DOES need to be programmed if it's replaced.
Hope this helps someone else out who is as lost as I was...