Denali slips in and out of 4x4

How may buttons for the 4X4 two , three , or four ? Do the lights flash ? Any messages - service four wheel drive system ? Which transfer case does it have ?

Transfer Case - NVG 246-NP8 (Two Speed Automatic)
The transfer case shift control module uses the VIN information for calculations that are required for the different calibrations used based on axle ratio, transmission, tire size, and engine. The system does not know which calibration to use without this information.
Transfer Case Encoder Motor
The transfer case encoder motor consists of a permanent magnet (PM) DC motor and gear reduction assembly. It is located on the left hand side (drivers side) of the transfer case. When activated it turns the sector shaft of the transfer case (clockwise or counter clockwise) to shift the transfer case. The encoder motor is controlled with a pulse width modulated (PWM) circuit within the transfer case shift control module. This circuit consists of a driver on both the Motor Feed A and Motor Feed B circuits. The encoder motor is bi-directional to allow the motor to shift the transfer case from 2HI or 4HI to NEUTRAL and 4LO positions.
Transfer Case Encoder
The encoder is mounted to the transfer case encoder motor assembly and is replaced as an assembly. The encoder converts the sector shaft position (representing a mode or range) into electrical signals inputs to the transfer case shift control module. The module can detect what position the transfer case is in by monitoring the 4 encoder channels (P, A, B, and C). These inputs translates into AUTO 4WD, 2H, 4H, NEUTRAL, and 4L or in transition between gears.
Transfer Case Motor Lock
The transfer case motor lock is used to provide a 2H, 4H, and 4L lock-up feature. When the lock circuit is energized, the transfer case encoder motor is allowed to turn. When the transfer case is placed 2H, 4H, or 4L the motor lock circuit has no power provided to it and the lock is applied. This assures that the transfer case remains in the current gear position. When AUTO 4WD is selected the motor lock remains applied until an adaptive mode (torque is applied to the front propshaft) is required. During an adaptive mode the motor lock circuit is energized and the motor lock is released, enabling the encoder motor to turn and apply torque to the front propshaft.


SERVICE indicator (4WD/AWD) Lamp
The SERVICE indicator (4WD/AWD) lamp is an integral part of the cluster and cannot be serviced separately. This lamp is used to inform the driver of the vehicle of malfunctions within the automatic transfer case (ATC) system. The SERVICE indicator (4WD/AWD) lamp is controlled by the transfer case shift control module via a Class 2 message or by a Sevice Indicator Control Circuit.

The first thing to do before assuming it's a loose wire would be to have it checked for codes , auto zone , advance etc... can not check this codes .
DTC B0768 Service Indicator Circuit High
DTC B2725 ATC Mode Switch Circuit Malfunction
DTC C0300 Rear Speed Sensor Malfunction
DTC C0305 Front Speed Sensor Malfunction
DTC C0308 Motor A/B Circuit Low
DTC C0309 Motor A/B Circuit High
DTC C0310 Motor A/B Circuit Open
DTC C0315 Motor Ground Circuit Open
DTC C0323 T-Case Lock Circuit Low
DTC C0324 T-Case Lock Circuit High
DTC C0327 Encoder Circuit Malfunction
DTC C0357 Park Switch Circuit High
DTC C0362 4LO Discrete Output Circuit High
DTC C0367 Front Axle Control Circuit High
DTC C0374 General System Malfunction
DTC C0376 Front/Rear Shaft Speed Mismatch
DTC C0387 Unable to Perform Shift
DTC C0550 ECU Malfunction
DTC C0611 VIN Information Error

If you know nothing about this , your best bet would be to take it to a qualified repair shop .