You may have a similar problem to me. Something to do with the Gem Module, Got a multimeter handy, or a Ford dealer who actually know what they are doing LOL.
This is copied from my post in the Modified 95-2001 section, It was written up by Joe.
“I suspect it's a GEM issue. If the GEM was calling for a shift and it was failing to complete the shift due to either mechanical or electrical failure, it *should* know that the shift hasn't happened, store a trouble code, and start blinking the lights. If it *thought* that the shift was being completed, but it really wasn't, it would turn the 4low light on signaling that it was completed.
With that in mind, I don't think the GEM is <i>trying</i> to make the shift in the first place. I suspect, as I mentioned in the other thread when you first discovered the problem, that the problem lies in the GEM not getting the proper inputs from the sensors it needs. Those things would be the switch (looks for a call to low range), the DTRS (tells the GEM the trans is in neutral), or the brake input (tells the GEM your foot is on the brakes. It also looks for speed under 3mph from the speed sensors, but if one of those wasn't working, it would know it, and it's unlikely that both sensors would fail simultaneously.
Sooooooo.....
First thing: Unhook the motor. Stopped, in neutral, foot on the brake, and flip the switch. See if the motor even tries to move. Check for power at the yellow or orange wires at the motor. I doubt you will have anything.
You'll need to get into the dash and access the connectors on the GEM. Remove the trim piece around the stereo, remove the stereo, remove the AC duct, and you should see the GEM along the side of the opening. (For left hand drives, it's on the left side, but the right hand drives may be mirror images.... I'm not sure) It'll be a big black box, about 30mm thick with three black plugs in it. One of those plugs will be a R/LG wire that's fed from the brake pedal position switch. Check for power at that wire with the brake pedal pressed and the brake lights on.
Unplug the connection on the transmission. You need to check for continuity through the neutral position on the digital transmission range sensor. The R/W wire should ground to the BK wire with the transmission in neutral. This lets the GEM know that the transmission is in neutral. Check that same R/W wire at the GEM as well. Make sure that wire doesn't have an open between the GEM and the DTRS.
Did you ever check the resistances on the 4WD mode switch on the dash? They should be 3900 ohms, 1100 ohms, and 360 ohms for auto, high and low respectively.
Did you replace the transfer case shift relay? I doubt that's the problem, but you never know. If you can access it, you can check for ground signals through the GEM when you make the shift, but that'll be extremely tough to do without a break-out box for those connectors.
Are you sure it's not the 20A MAXI fuse in the power distribution block? Fuse # 6....”
