1. question:
is there one or two speed sensors on the transfer case of a 1998 Explorer 4.0 SOHC? if 2, where is the second one. I can see the one right by the rear drive shaft.

2. question:
I gotta ask again, everytime I start my Expl. it is in 4x4. I can't turn it off. When I switch to 4x4 High the light comes on like usual, but when I turn it off 4x4 is still engaged!!
I also can turn to 4x4lo and hear the clunk when it engages and also back.

So when I drive half a mile it disengages and the 4x4 lights start flashing 6 times.
I know, I know, I can search for the 6x flahsing etc. I did, but I couldn't find an explanation for this case.
I took out the speed sensor right next to the rear driveshaft to see if it is clean, looks good, but might still be toast!

any ideas?

I am pretty sure there are two speed sensors. I tried looking in both my Haynes/Chilton manuals but they were both worthless when it comes to that part of our trucks. Might be worth talking to a dealer service guy for advice. I doubt most non-Ford mechanics would know very well.

yes, I thought I heard something about 2 sensors as well. But I seriously couldn't find the second one

ok, after an exhaustive search I found that the second speed sensor is behind the shift motor, right? So I need to take the shif motor off to reach it?

so if anybody else has any ideas, what else it could be the problem with my second question.

Oh, and where can I get the speed sensors for cheap?

Your only two options are probably Fort Parts Network and Ford.

Good luck to you.
I am currently battling a very similar problem.
http://www.explorerforum.com/forums/showthread.php?t=128134

There are two Hall-effect sensors one above the rear driveshaft, and one behind the shift motor.
A new rear cost 47.95 from my ford dealer. And the front is 53.95.

In addition to this you have a VSS in the rear differential which may be responsible, Cost 29.95.

This could also be related to the shift motor. While you have it off to check the sensor you may as well check it out as well.
http://www.explorerforum.com/forums/showthread.php?t=123542

In addition there are two ABS/Speed sensors in each front hub which feed info to the GEM which is behind your dash and controls the 4x4 system.

All of the above listed components feed info to the GEM which allows it to decide what your control track is going to do as well as other 4x4 modes and many other things. These units have been known to fail. Replacement is around 600 dollars and a reflash is possible from some dealers for the cost of a visit and an hours labor.

I may have missed a bit, but follow the links and see what you find with a bit of testing

thanks, I will go through those links and post news, if I have some...