To support my repair yesterday I found GM had a TSB 02-04-21-004 on this problem.
Service Bulletin
File In Section: 04 - Driveline Axle
Bulletin No.:
Date:
02-04-21-004
April,2002
CHEVROLET
,.--.
Subject: "Service 4WO" Indicator Illuminated,
(Replace Transfer Case Shift Control Switch)
Models: 1999-2002Chevrolet and GMC elK Pickup and Utility Models
(Silverado, Sierra, Avalanche, Suburban, Tahoe, Yukon, Yukon XL)
with Four Wheel Drive and NVG 236/246 Transfer Case (RPO NP8)
NP8 means 4 button autotrac
Condition
Some customers may comment on the Service 4WD
~ indicator illuminating. Upon investigation, the technician
may find DTC B2725 set.
Cause
The condition may be due to a intermittent fault in the
transfer case shift control switch.
Correction
Important: The transfer case shift control module
should not need replacement. DO NOT replace
P/N 15749703 unless diagnosis points to the module
as the malfunction.
Replace the transfer case shift control switch using
published Service Information procedures.
.----
Parts Information
Part Number DescrIption
15709327 Transfer Case Shift Control Switch
Parts are currently available from GMSPO.
Warranty Information