with what your saying here you best have them service the transfer case.
IF you take the time to read all that is here on this particular post on this issue you will learn much.
you have a transfer case and it has a special fluid . if the fluid is with 110,000 miles on it I will not be surprised if you will need a complete rebuild.
I would also take the time to read the owners manual as well.
the code is the encoder motor. that gets damaged from low/worn fluid.
you need to crawl under the vehicle to check it.
all drive train fluids require replacing every 40,000 miles.