2004 Montero transmission slips when accelerating full of transmission fluid . any idea ? and my 4 wheel drive what gear do I need to be in to engage /disengage ?

SOURCE: Mitsubishi Montero

I had the same problem as described here ... quoted "sometimes flashing quickly, slowly, or sometimes turning off. The antilock brake light has also come on several times."

and the dealership told me that the electrical conector that goes externally to the gear drive is getting dirty with oil .... two times I sent the car and they told me the same and solved it ... no charges at least but I having the same problem again ... I really want to know where is that electrical conector just to clean it up or put something that avoid dirty or oil get in it again ...

SOURCE: Warning light for 4-wheel drive

I had this problem on my 1995 Montero. The 4-wheel-drive indicator lights wouldn't stop blinking when I switched from 4-wheel drive to 2-wheel drive. It turns out that I had a slow leak in one of the front tires. After I fixed the leak and made sure the pressure was the same in both front tires, the problem went away. 
This made sense to me because if one tire is much lower in pressure, it's closer to the ground, i.e. has a smaller radius, and therefore rotates more quickly. The manual says to drive in a straight line when disengaging 4-wheel drive but with the lower tire pressure on one side it was the equivalent of driving in a circle. 
You could try checking your tire pressures and see if that makes a difference. Hope this helps. 

SOURCE: seems transmission gear shift problem

Pull the distick and smell the oil. If it's discoloured (black or dark brown) you know the transmission friction plates are burnt and needs a rebuilt.
Cheers

SOURCE: 1992 Mitsubishi Eclipse transmission slips in overdrive

well the low cost way to go first would be to try and change the trans fluids. If the problems still remains the it may be an internal problem

SOURCE: 2000 Mitsubishi Montero 4 wheel drive indicator light flashes

get oil changed in gearbox and the switch on the box