95 tahoe four wheel drive stopped working/shift light not working

I have a 1996 tahoe that did the same thing to me.

There is no vacuum lines, it is all electric. The motor on the front differental is controled by the actuator switch on the top of the trans case. The motor is controled by 3 wires. 1 is a ground and the other 2 are signal wires. When the truck is in 2wd, the motor will get 12volts to ground on 1 wire all the time to turn the motor out. When you put it in 4wd, the motor will get 12 volts to ground on both signal wire to turn the motor in.

Here is the point!! Check to make sure that none of those wires from the t-case switch to the motor are shorting out on something metal. In my case those wires came out of the wire loom(black tube) and rubed the insulation off. shorting on the t-case.

If your truck ever gets stuck in 4wd, were you have to keep it in 4wd or the front end makes a hell of a noise, the actuator switch on the t-case is none to go out. cheap fix. If that ever happens and you are in a pinch. Unscrew the motor out of the front end and manualy give the motor the signals that it needs with jumper wires and the trucks battery to turn the motor out, screw the motor back in. Don't put the wires back on till you can fix it right.

First check that the vacuum line to the actuator is good. The actuator is in the right front fender under battery. Usually the rubber will crack on the diaphram. This is most likely the problem due to you mentioning the light not working. The vacuum diaphram pulls the cable to activate the Front axle which turns the light on. If you need a new Vacuum diaphram, auto parts have them @ $50, or ebay for $35. Hope this helps and have a good day.