Conditions for Setting the DTC
WARNING: This page is about a different car, the 2004 Oldsmobile Bravada and 2004 Buick Rainier. 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 in which the encoder feed back should stay within, 0.5-4.5 volts. The DTC sets if the encoder signal feed back falls out of this range.