Flashing 4wd indicator light

I have a 99 Isuzu Rodeo. When the 4X4 is engaged, my indicator light comes on and the 4X4 works. When I press the button to disengage, the 4X4 does go into 2wd. But, the indicator light continuiously flashes.

Any ideas or possible solutions would be appreciated.

One of the hubs is not fully disengaging. Trying backing up or making a series of slow sharp turns to the left and to the right and see if it goes off. Mine did this too, because I found the tires were slightly different diameters, causing the drive line to bind and would not allow the hubs to disengage. Try that, otherwise you might have a bad sensor.