A 98 Sport only has the sensor for the FRONT shaft in the t-case. For 98 they used the rear ABS sensor for the rear wheel speed sensor for both the ABS and the automatic 4x4.
If it was a speed sensor, odds are the system would detect two different wheel speeds and incorrectly engage the 4wd. In my readings on here, that tends to be the typical failure mode for the speed sensor(s).
Just thinking about this problem in the daylight, there are a few things that you could check just to see what the scoop is before taking it in: Pop the stereo out, but leave the 4wd switch connected. On the right side of the dash opening, you'll see the TOD relay:
That connector should have five wires to it. With the engine idling in park and the switch set to 4auto, you should have power to both LB/BK wires, and *some* voltage coming out of the brown wire. If you have power in but no power out, then the TOD relay is shot. If you don't have power in, then check fuse #4 (30A Maxi) in the power distribution box that feeds the accessory delay relay. (If you have a moonroof and the moonroof works, that tells us that the fuse is good, but the TOD relay or the accessory delay relay could still be bad)
The diagnostic procedure is lengthy, and the Snap-On unit should work well. It can't hurt to do some poking and prodding anyways.
Call Ford and see if your explorer has the sensors on the transfer case. If they do, then replace them and your problem will be fixed. You can not get this part anywhere else besides the dealer. I can take a picture of the sensors and post it
