There is no speedo cable in your rig. Its just sensor wires from the VSS.
The shift motor only works for low range. It can only be activated while stopped, in neutral, and the brake pedal depressed. Same for taking it out of low range.
4wd H can be activated on the fly as it does nothing for the shift motor. It only sends a signal to the clutch pack that is used for 4wh.
There is a chance of internal damage to the t-case if the lights are blinking.
No ABS light means you have a good circuit, so I would forget about that all together.
There are more things that can be wrong, such as the GEM, and 4x4 module. Just have to keep digging with it.
Have you checked the fluid level in the t-case yet? What color is it? Was it low? Do you see any signs of a leak? Check the obvious first.
Once again everyone thank you for the info. I ment to say the speedo Needle On the dash. I do have a leak. I just had it in the shop. One of the universal joints in the front Drive shaft was starting to go. He also said he had to add a quart of fluid to the Transfer case. It could well be that Transfer case has internal damage. I might just have to make it until spring when I can pull the case apart and see what's going on.