DTC 2 Or DTC 1 & 2 - Encoder Fault

Disconnect transfer case harness connector. Measure voltage on Brown/White, Red/White, Dark Blue/White, Yellow/Black wires and ground. If 5 volts exists on each circuit, go to next step. If 5 volts does not exist on each circuit, go to step 3).

Fig 1: Identifying TCCM Harness Connector Terminals (Viewed From Back of Connector)
Courtesy of GENERAL MOTORS CORP
Measure resistance between Black/White wire at transfer case harness connector and ground. If resistance is less than 2 ohms, replace encoder and shift motor assembly. If resistance is greater than 2 ohms, repair open Black/White wire.
Measure resistance of Brown/White, Red/White, Dark Blue/White, Yellow/Black wires between transfer case harness connector and TCCM harness connector. If resistance is greater than 2 ohms, repair open circuit as necessary. If resistance is less than 2 ohms on all circuits, replace TCCM. Recheck for symptom and DTC.