2004 sierra 4LO problem

I have a 2004 Sierra, problem is I can switch to 2wd and 4HI with no problem, But when I attempt to put in N and switch to 4Lo from 4HI the light blinks for a bit, I hear the case trying to engage but then stops and goes backto 4HI.

Any suggestions or fixes.

Thanks

You must be sitting still in N, I suppose this is what you are doing, if so the dash or the transfer encoder can be the problem.