Conditions for Setting the DTC
WARNING: This page is about a different car, the 2005 GMC Yukon XL, 2005 GMC Yukon, 2005 Chevrolet Tahoe, 2005 Chevrolet Suburban, and 2005 Chevrolet Avalanche. However, it is still accessible from the selected car via links, so may be relevant.
The transfer case shift control module has a predefined range, 0.5-4.5 volts, in which the encoder feed back should stay within. The DTC sets if the encoder signal feed back falls out of this range.